Broadband ISP and mobile operator Virgin Media and O2 (VNO2) have today boosted their existing £400,000 Tech Lending Community (TLC) scheme alongside environmental charity Hubbub, which aims to provide hundreds of “second-hand” tablet computers and smartphones to help people in need get online across the UK. The Tech Lending Community scheme, which was first established […]
CMA completes first investigation of Vodafone Three Merger
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The merger was agreed last year, with Vodafone taking a 52% in the new business and Three UK taking the remaining minority stake
This week, the UK competition and markets authority (CMA) have completed the first phase of its investigation into the merger which was put in place to identify whether the deal may lead to a ‘substantial lessening of competition’.
The review, which began in January, concluded in short that the “CMA is concerned that combining these two businesses will reduce rivalry between mobile operators to win new customers.”
The CMA have concluded that it has identified concerns significant enough to warrant further scrutiny in a Phase 2 investigation, in which an independent body will review the concerns raised in phase one in more depth.
The high level of CMA intervention is necessary because, if the deal is given the greenlight, it will reduce the number of MNOs in the UK from four to three, with the newly merged company having a market share of 32.1%. Additionally, and perhaps rather obviously, the CMA found that “Vodafone UK and Three UK provide important alternatives for mobile customers”.
Of particular concern to the CMA is the potential impact on smaller mobile virtual network operators (MVNOs), such as Sky Mobile, Lebara, and Lyca Mobile. These operators rely on access to larger network infrastructures to provide services to their customers. The merger could potentially limit their ability to negotiate favourable deals with fewer network operators available to host their services.
Both Three and Vodafone have made significant investments in their networks in recent years, including rolling out 5G. Unsurprisingly, both companies are emphasising that the merger will allow them jointly invest £11 billion in services and next generation wireless infrastructure.
According to the CMA, Vodafone UK and Three UK have five working days to respond with meaningful solutions to the CMA, otherwise the deal will be referred to a more in-depth Phase 2 investigation.
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