Three and Vodafone will merge in the UK

They (regulators) said it couldn’t be done (originally) but Three is finally approved for a merger. The UK’s Competition and Markets Authority (CMA) has given the go ahead for a merger between Three and Vodafone, first proposed by the companies in June 2023. The decision follows an independent inquiry group’s investigation into the move’s impact.

CMA is allowing the deal to proceed as long as “both companies sign binding commitments to invest billions to roll out a combined 5G network across the UK,” a release states. “The network commitment would be supported by shorter term customer protections which would require the merged company to cap certain mobile tariffs and offer preset contractual terms to mobile virtual network operators, for a period of three years.” CMA and UK communication services regulator Ofcom will both oversee these commitments and the merged company must produce an annual implementation report.

Chair of the independent inquiry group, Stuart McIntosh, explained, “We believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed — but only if Vodafone and Three agree to implement our proposed measures.”

Three tried to merge with O2 in 2015, but the European Commission (yes, this was pre-Brexit) blocked it a year later. Then European Commissioner for competition Margrethe Vestager, stated that the concessions Three offered wouldn’t offset the deal’s potential to limit competition and bring higher prices. CMA concurred but, in 2021, allowed O2 to merge with Virgin Media, determining that it would not have a “substantial” impact on competition due to the nature of their combined offerings.