The high-profile merger between Vodafone and Three has been given the official go ahead, paving the way for a new market leader in the UK’s mobile network operator business.
The UK’s Competition and Markets Authority (CMA) watchdog has approved the £16.5 billion deal, which will see Vodafone and Three combining their 27 million customers to become the biggest mobile network in the country.
This green light has been issued on the merger despite the fact that the independent inquiry group had found that it could lead to higher prices for customers. It also noted that it would lead to less advantageous terms for virtual network providers, which rely on the UK’s big four (soon to be big three) network infrastructure to offer their services.
In order for the merger to go ahead, the CMA has insisted that action be taken by both networks to mitigate such issues. In the short term, Vodafone and Three will be required to cap certain mobile tariffs and data plans and offer certain contractual terms to virtual mobile network operators over the next three years.
More widely speaking, Vodafone and Three must sign up to a binding commitment to invest billions into a combined 5G network over the next eight years. The UK’s next-generation (we can probably call it current generation by now) mobile network rollout has been pretty sluggish, so this could signal one obvious positive for UK mobile users.
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“Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures,” said Stuart McIntosh, who chaired the independent inquiry group.
This won’t be the first high probile mobile merger in the UK, of course. Orange and T-Mobile joined to form EE in 2010 before being acquired by BT in 2016, while Virgin Media and O2 merged in 2021.
EE currently occupies the number one network operator spot in the country with 25 million customers, followed closely by O2 on 24 million. Vodafone and Three are in third and fourth with 17.5 million and 9.9 million respectively.
