LONDON (ShareCast) - (Sharecast News) - The Competition and Markets Authority has cleared the proposed merger between Vodafone and Three on the proviso that the companies promise to invest billions to roll out a combined 5G network across the UK.
The competition regulator also said that the telecoms companies, which first announced their tie-up 18 months ago, should also cap certain mobile tariffs and data plans for three years, protecting customers from short-term price rises.

Vodafone said in a statement that it welcomed the decision and expects the merger to complete in the first half of 2025, after which it will own 51% of the combined entity with the option to acquire the remaining stake from Three owner CK Hutchison after three years.

Since September, the CMA has been conducting an in-depth phase-two investigation into the merger and provisionally found that it could lead to higher prices for customers and less advantageous terms for virtual network providers (which depend on such networks to supply their own retail customers).

As a result, the CMA's approval is subject to a number of legally binding commitments, including network upgrade, integration and improvements over the next eight years, price caps for customers, and the offer of pre-set prices and contract terms for wholesale services to ensure virtual network provides obtain competitive terms.

"It's crucial this merger doesn't harm competition, which is why we've spent time considering how it could impact the telecoms market," said Stuart McIntosh, chair of the independent inquiry group leading the investigation.

"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."

Vodafone and Three have committed to invests £11bn to upgrade their 5G network, which they say will reach 99% of the UK population and benefit more than 50m customers.

"Today's decision creates a new force in the UK's telecoms market and unlocks the investment needed to build the network infrastructure the country deserves," said Vodafone chief executive Margherita Della Valle.

"Today's approval releases the handbrake on the UK's telecoms industry, and the increased investment will power the UK to the forefront of European telecommunications."

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