The recent provisional findings from the Competition and Markets Authority (CMA) have put the proposed merger between Vodafone UK and Three UK in the spotlight.
Vodafone UK has pushed back against some elements of the findings, maintaining that the merger will bring significant benefits to the UK’s digital infrastructure, economy, and mobile competition landscape.
Vodafone UK response CMA findings
Earlier this week, the CMA released its provisional findings regarding the highly anticipated merger between Vodafone UK and Three UK. These findings raised concerns about potential price hikes and competition within the mobile industry.
However, Vodafone UK remains optimistic, believing the merger will transform the country’s digital infrastructure. The company has already announced its commitment to invest £11 billion into a 5G Standalone (5G SA) network that aims to cover 99% of the UK population by 2034.
In its response, Vodafone UK acknowledged the CMA’s announcement as “an expected next step” in the ongoing review process.
While the company strongly disagrees with some of the conclusions—particularly concerning pricing—Vodafone UK is committed to working with the regulator to resolve these issues before the final report is issued in December.
The Merger’s Economic and Competitive Impact
One of the primary concerns voiced by the CMA revolves around the potential for increased prices post-merger.
However, Vodafone UK has been vocal in disputing this, with Ahmed Essam, Executive Chairman of Vodafone Germany and CEO of European Markets, stating,
“Our investment case is not based on hypothetical price rises.”
The company insists that pricing concerns do not align with their business plans and assures customers that social tariffs will continue to protect vulnerable consumers.
The merger presents a rare opportunity for the UK to significantly improve its mobile infrastructure. By creating a stronger third mobile network operator, Vodafone UK believes it will not only improve consumer choice but also boost competition in the wholesale market.
This could benefit smaller Mobile Virtual Network Operators (MVNOs), which have experienced substantial growth in recent years.
Expected Benefits of the Merger:
- £11 billion investment in 5G infrastructure
- 99% UK population coverage by 2034
- £158 billion in productivity benefits over the next decade
- 5G access in every community, school, and hospital
If successful, the merger will bring vast improvements to 5G connectivity, allowing the UK to keep pace with global advancements in telecommunications. It will also ensure that consumers have access to better services without price increases, according to Vodafone UK.
Pricing and Competition Concerns
Despite the CMA’s concerns about possible price increases, Vodafone UK has been firm in its stance that the merger will not negatively impact consumers. In fact, the company asserts that the improved network capabilities will enhance competition, particularly for MVNOs, which lease network access from larger operators.
Vodafone UK also highlighted that both Vodafone and Three have agreed to independent monitoring, ensuring that any promises made about network investments and pricing will be kept under close scrutiny.
Ofcom, the UK’s communications regulator, will oversee this process to ensure compliance, adding an extra layer of assurance for consumers.
Vodafone’s Commitment to the UK’s Digital Future
Vodafone UK has framed the merger as more than just a business deal—it’s a pivotal moment for the UK’s digital future. The investment in 5G technology and infrastructure will contribute significantly to the government’s long-term 5G strategy, enhancing connectivity nationwide.
In response to the CMA’s findings, Vodafone UK reaffirmed its belief in the merger’s ability to “deliver £158 billion in productivity benefits”. This would enhance network capabilities, thereby improving digital services across the country.
Additionally, the merger would facilitate greater innovation, leading to increased economic growth. This aligns with the government’s goal to establish the UK as a leader in 5G technology.
Vodafone UK 5G Investment Plan:
Main Elements |
Detail |
|---|---|
| Total Investment | £11 billion |
| 5G Coverage Goal | 99% of UK population by 2034 |
| Productivity Benefits | £158 billion over the next decade |
| 5G Infrastructure Target | Every community, school, and hospital |
Moving Forward: Collaboration with the CMA
While Vodafone UK disagrees with several aspects of the CMA’s findings, the company remains committed to engaging constructively with the regulator. Both Vodafone UK and Three UK are reviewing the CMA’s Notice of Possible Remedies and will continue discussions to address any remaining concerns.
The final decision from the CMA is expected on 7 December 2024. Until then, Vodafone UK will keep working with the regulator to ensure the merger delivers benefits not only for its customers but for the entire UK mobile industry.
