British regulators approve $19 billion merger between Vodafone and Three Mobile

Britain's competition regulator on Thursday approved, subject to certain conditions, the merger of telecommunications firms Vodafone and Three within the United Kingdom.

The Competition and Markets Authority (CMA) said the 15 billion pound ($19 billion) merger could be allowed to proceed if each firms made “binding commitments to invest billions of dollars” to roll out a shared 5G network within the country sign across the UK

The combined company would even be required to cap certain wireless tariffs and offer “preset contract terms” to so-called mobile virtual network operators (MVNOs) – mobile operators that lock onto one other company's network.

Vodafone and CK Hutchison, the owner of the Three UK network, announced the deal last 12 months. The now approved deal will see the 2 brands' UK operations combined, giving Vodafone a majority stake of 51% and CK Hutchison retaining a minority stake.

“This mega-merger marks one of the most significant moments in the history of British mobile communications and heralds the arrival of a new market leader with a total of 29 million customers,” Kester Mann, director of consumer and connectivity at CCS Insight, said in a note on Thursday.

“The result – after months of intensive regulatory scrutiny – is about as good as it could have been for Vodafone and Three. Not only have they received approval, but the agreed remedies and obligations are less onerous than feared.”

The merger will give the UK the digital infrastructure it truly deserves, says Vodafone's CEO

The CMA's decision got here after it launched an antitrust investigation into the deal in January and announced an in-depth investigation in April. Last month, the competition watchdog laid out a path for the deal to maneuver forward provided certain remedial measures were taken.

The regulator feared that the merger, which would scale back the variety of major telecom operators from 4 to 3, would result in higher prices or lower services.

Vodafone said the deal is predicted to formally close in the primary half of 2025.

“Today’s decision creates a new force in the UK telecoms market and unlocks the investment needed to build the network infrastructure the country deserves,” Vodafone CEO Margherita Della Valle said in a press release.

CMA requires commitments

The legally binding commitments stipulate that Vodafone and Three will construct their 5G network over the subsequent eight years.

Vodafone previously said the combined company would invest £11 billion within the UK's telecoms infrastructure.

The recent company must also cap certain wireless and data plans for 3 years and offer preset prices and contract terms for wholesale services to MVNOs.

These terms and conditions are monitored by the CMA and communications regulator Ofcom.

“After careful consideration of the evidence and the extensive feedback we have received, we believe that the merger is likely to boost competition in the UK mobile sector and that it should go ahead – but only if Vodafone and Three agree to implement our proposed measures “,” Stuart McIntosh, chair of the independent inquiry group that led the investigation at the CMA, said in a press release.

Paolo Pescatore, founder of PP Foresight, said it would take a while for the benefits of the deal to become apparent.

“Maybe a decision was made today, but it's still a waiting game. The bottom line is that it will take many years to realize the full benefits of the deal and many difficult decisions remain,” Pescatore said.

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