Proposed commitments would ensure the merger boosts competition
in UK telecoms with rollout of 5G connectivity.
- Ofcom and CMA would oversee commitments from Vodafone and
Three to implement, in full, the merged company's network plan
- Certain mobile tariffs to be capped for three years whilst
virtual mobile providers will have access to pre-set wholesale
prices and contract terms
The Competition and Markets Authority (CMA) has decided
Vodafone's merger with Three should be allowed to proceed if both
companies sign binding commitments to invest billions to roll out
a combined 5G network across the UK. The network commitment would
be supported by shorter term customer protections which would
require the merged company to cap certain mobile tariffs and
offer preset contractual terms to mobile virtual network
operators, for a period of 3 years.
In September, the independent inquiry group leading the in-depth
Phase 2 investigation of the merger provisionally found it could
lead to higher prices for customers and less advantageous terms
for virtual network providers (which depend on networks like
those provided by Vodafone and Three to supply their own retail
customers).
Since publishing those findings, the group has explored how its
concerns might be resolved and in November published a remedies
working paper which included a range of potential remedy options.
The group has since analysed responses to the working paper and
closely engaged with respondents. The group has also sought
further input from Ofcom, the communications regulator.
In its final decision, published today, the group has confirmed
it is now satisfied that the proposed network commitment,
supported by shorter term protections for both retail and
wholesale customers, resolve its competition concerns.
The merger will therefore be allowed to proceed subject to the
following legally binding commitments which require:
-
Delivery of the joint network plan, which sets out the
network upgrade, integration and improvements Vodafone and
Three will make to their combined network across the UK over
the next 8 years. The group has concluded that by
significantly improving the quality of the combined network,
the full implementation of this plan would boost competition
between the mobile network operators in the long term,
benefiting millions of people who rely on mobile services.
- Capping selected mobile tariffs and data plans for 3 years,
directly protecting large numbers of Vodafone / Three customers
from short-term price rises in the early years of the network
plan.
- Offering pre-set prices and contract terms for wholesale
services (again for 3 years) to ensure that virtual network
providers can obtain competitive terms and conditions as the
network plan is rolled out.
The network commitment would be overseen by both Ofcom and the
CMA, with the merged company also required to publish an annual
report setting out its progress on the implementation of the
network plan. The CMA would have responsibility for monitoring
and enforcing the protections relating to consumer tariffs and
wholesale terms.
Stuart McIntosh, chair of the independent inquiry group leading
the investigation, said:
It's crucial this merger doesn't harm competition, which is why
we've spent time considering how it could impact the telecoms
market.
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.
Both Ofcom and the CMA would oversee the implementation of these
legally binding commitments, which would help enhance the UK's 5G
capability whilst preserving effective competition in the sector.
More information can be found on the Vodafone / CK Hutchison JV
case page and on the detailed guidance
page.
Notes to editors
-
The publication of the final report by the group marks the
end of the CMA's Phase 2 merger investigation. If Vodafone
and Three agree to the commitments, the CMA will now work to
implement them, otherwise the CMA will block the deal.
-
Vodafone UK (which is owned by Vodafone Group Plc) and Three
UK (which is owned by CK Hutchison Holdings Limited) are 2
major providers of mobile telecommunication services in the
UK. Last year both businesses announced a joint venture
agreement which would bring tens of millions of customers –
representing 27 million subscriptions - under a new, single
network operator.
-
The 4 mobile network operators in the UK are Vodafone UK,
Three UK, BTEE and Virgin Media O2.
