Three and Vodafone have reached an agreement to merge their UK operations, creating the country’s largest mobile network with around 27 million customers. The deal, which is still subject to regulatory approval, could be worth around £15 billion ($18.6 billion).
Under the terms of the agreement, Vodafone will own 51% of the combined company, while Three will hold 49%. The new company will be headquartered in the UK and will operate under the Vodafone brand.
The merger would create a stronger competitor to BT’s EE and Virgin Media O2. It would also allow Three and Vodafone to invest more in 5G and other new technologies.
CMA Review Process
The Competition and Markets Authority (CMA) is the UK’s competition regulator. It is responsible for assessing mergers and other business deals to ensure that they do not harm competition.
The CMA’s review process for mergers is typically 12-18 months long. The CMA will first gather information about the deal, including market data and financial information. It will then consult with stakeholders, such as businesses, consumers, and trade unions.
After the CMA has gathered all of the information it needs, it will make a decision on whether to approve the merger. If the CMA approves the merger, it will be subject to a number of conditions, such as requiring the new company to sell off assets or to open up its network to other mobile operators.
The merger is expected to be completed in early 2024, subject to CMA approval.
Potential Benefits and Risks
The merger could have a number of potential benefits for consumers, including:
- Lower prices: The merger could lead to lower prices for mobile phone contracts. This is because the new company would have a larger customer base and would be able to negotiate better deals with suppliers.
- Improved coverage: The merger could lead to improved coverage in rural areas. This is because the new company would have access to the networks of both Three and Vodafone.
- Faster speeds: The merger could lead to faster speeds for mobile data. This is because the new company would be able to invest more in its network.
However, the merger could also have a number of potential risks for consumers, including:
- Reduced competition: The merger could reduce competition in the UK mobile market. This is because the new company would control around 60% of the market.
- Less choice: The merger could lead to less choice for consumers. This is because the new company may be less likely to offer new and innovative services.
- Higher prices: The merger could lead to higher prices for mobile phone contracts. This is because the new company would have less incentive to compete on price.
The Vodafone and Three merger is a significant development in the UK mobile market. The merger could have a number of benefits for consumers, but it is important to monitor the CMA review process to ensure that competition is not harmed.