The £16.5 billion merger of telecoms giants Vodafone and Three merger may go ahead following a provisional ruling from the Competition and Markets Authority.
In September the regulator threw the deal into doubt over competition concerns, with its investigation concluding that it would lead to price increases for tens of millions of mobile customers or result in smaller data packages while harming the position of mobile virtual network operators such as Sky Mobile, Lyca, Lebara and iD Mobile.
Following a consultation period, the CMA has now provisionally found that a multi-billion-pound commitment to upgrade the merged company’s network across the UK – including the rollout of 5G – combined with short-term customer protections could solve these concerns and allow the merger to go ahead.
Its Remedies Working Paper says the companies must deliver their joint network plan, which sets out the network upgrade and improvements they will make through significant levels of investment over the next eight years across the UK. This would be a legal obligation overseen by both Ofcom – the telecoms regulator – and the CMA.
It also calls on the firms to commit to retain certain existing mobile tariffs and data plans for at least three years, protecting millions of current and future Vodafone/Three customers – including customers on their sub-brands – from short-term price rises in the early years of the network plan.
It also required them to commit to pre-agreed prices and contract terms to ensure that mobile virtual network operators can obtain competitive wholesale deals.
Stuart McIntosh, chair of the inquiry group leading the investigation, said: “We believe this deal has the potential to be pro-competitive for the UK mobile sector if our concerns are addressed.
“Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger.
“A legally binding network commitment would boost competition in the longer term and the additional measures would protect consumers and wholesale customers while the network upgrades are being rolled out.”
A final decision is due before 7th December.