UK approves Vodafone and Three merger with conditions

The UK Competition and Markets Authority (CMA) has approved the merger between Vodafone and Three, two of the country’s largest telecom operators, in a $19 billion deal. The merger, which has faced intense scrutiny, was initially investigated due to concerns over potential price hikes, reduced services, and lower investments in mobile networks. However, the CMA approved the deal with conditions to address these concerns, including commitments for significant investment in a nationwide 5G network.

The companies must also cap mobile tariffs for the next three years and maintain contractual terms for mobile virtual network operators (MVNOs) during that period. The CMA’s decision marks a shift from previous cases where “4-3” mergers in the telecom sector were allowed only with significant structural changes. This approval is seen as a pragmatic approach, with the CMA confident that competition will be strengthened by a well-resourced trio of mobile operators in the UK.

Vodafone’s CEO, Margherita Della Valle, welcomed the approval, emphasising the benefits for consumers and businesses, including wider coverage and faster mobile speeds. The merger is expected to accelerate the UK’s position in European telecommunications, with a combined investment in the sector. The CMA and Ofcom will oversee the implementation of the agreed measures to ensure competition is maintained.