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A final decision on the merger is expected by the end of the year
This week, Vodafone and Three have published a joint statement on the company’s merger in response to a statement from the Competition and Markets Authority (CMA) earlier this month, which outlined its provisional findings.
Following a second probe earlier this month, the CMA once again raised concerns that the deal could lead to higher prices and reduced service quality for millions of UK mobile customers. Specifically, it related to three key areas:
Potential price increases
Impact on Mobile Virtual Network Operators (MVNOs), such as Sky Mobile or Lyca Mobile
Uncertainties over on network quality claims
At the time, the CMA said, “we will now consider how Vodafone and Three might address our concerns about the likely impact of the merger on retail and wholesale customers while securing the potential longer-term benefits of the merger, including by guaranteeing future network investments.”
Today, the two companies have responded to the CMA’s findings, saying they disagree with its conclusions and arguing the “merger will be pro-growth, pro-customer, pro-investment and pro-competitive for the UK”.
“It is a once-in-a-generation opportunity to transform UK digital infrastructure,” the companies continued
The companies have proposed solutions to address the CMA’s concerns, including a legal commitment to invest £11 billion in the UK’s network, which will be overseen by Ofcom. They also plan to sell part of their spectrum and enter a network-sharing agreement with Virgin Media O2 (VMO2), which they say will benefit over 50 million customers across the country.
In response to worries about price increases, Vodafone and Three have pledged to keep tariffs at £10 or lower for two years on the SMARTY brand and on social tariffs for the VOXI and SMARTY brands. On the wholesale front, they will offer more access to their network for mobile virtual network operators (MVNOs) to ensure better deals for customers.
While these pledges are sure to go some way towards reassuring the CMA, whether they will ultimately be enough remains to be seen. Vodafone and Three have long said that the merger would enable them to invest £11 billion in their infrastructure, so making that a legal pledge does not seem to be a major change. Similarly, promises to keep tariffs below £10 on some of their budget brands for two years is promising, but does not represent a long-term fix for consumer affordability.
Nonetheless, Vodafone and Three say they will continue to work closely with the CMA, and “remain confident that they can secure approval”.
A final decision on the merger is expected by 7 December.
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