The Competition and Markets Authority (CMA) has provisionally
found that a multi-billion-pound commitment to upgrade the merged
company's network across the UK, including the roll-out of 5G,
combined with short-term customer protections could solve
competition concerns identified in September and allow the merger
to go ahead.
The CMA investigation – led by an independent inquiry group –
provisionally found in September that the merger could lead to
higher prices for customers and harm the position of mobile
virtual network operators, such as Sky Mobile, Lyca, Lebara and
iD Mobile. The CMA also consulted on potential solutions to
address its concerns – known as remedies.
The CMA has today set out a Remedies Working Paper to seek views
on the effectiveness of a proposed remedy package.
It provisionally finds that a legally binding commitment to
undertake the network integration and investment programme
proposed by Vodafone and Three would significantly improve the
quality of the merged company's mobile network, boosting
competition between mobile network operators in the long term and
benefiting millions of people who rely on mobile
services.
The CMA also found that short term protections would be needed to
ensure that retail consumers and mobile virtual network operators
can continue to secure good deals during the initial years of
network integration and investment roll-out.
The remedies proposed today would require Vodafone and Three
to:
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deliver their joint network plan – which sets out the network
upgrade and improvements they will make through significant
levels of investment over the next 8 years across the UK.
This would be a legal obligation overseen by both Ofcom – the
telecoms regulator – and the CMA
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commit to retain certain existing mobile tariffs and data
plans for at least 3 years, protecting millions of current
and future Vodafone / Three customers (including customers on
their sub-brands) from short-term price rises in the early
years of the network plan
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commit to pre-agreed prices and contract terms to ensure that
Mobile Virtual Network Operators can obtain competitive
wholesale deals
Stuart McIntosh, chair of the inquiry group leading the
investigation, said:
We believe this deal has the potential to be pro-competitive for
the UK mobile sector if our concerns are addressed.
Our provisional view is that binding commitments combined with
short-term protections for consumers and wholesale providers
would address our concerns while preserving the benefits of this
merger.
A legally binding network commitment would boost competition in
the longer term and the additional measures would protect
consumers and wholesale customers while the network upgrades are
being rolled out.
Today's announcement is provisional, with a final decision due
before the 7 December statutory deadline. The inquiry group is
inviting feedback on today's announcement by 5pm on 12
November.
More information can be found on the Vodafone / CK Hutchison JV
case page and on the detailed guidance
page.
Notes to editors
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The CMA's guidance explains that the Remedies Working Paper
may be published on the CMA website if the CMA deems wider
consultation to be necessary. In this case, the CMA considers
the publication of the Remedies Working Paper is appropriate
for third parties to understand its provisional decision and
provide any further views before the final
decision.
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The inquiry group's decision set out in the Remedies Working
Paper published today on the appropriate remedy to address
the competition concerns identified in the provisional
findings is provisional. Following consultation on the
Remedies Working Paper, the Group will take its final
decision on both the competition issues and any remedies by 7
December 2024.
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Vodafone UK (which is owned by Vodafone Group Plc) and Three
UK (which is owned by CK Hutchison Holdings Limited) are two
major providers of mobile telecommunication services in the
UK. Last year both businesses announced a joint venture
agreement which would bring their 27 million customers under
a new, single network operator.
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The 4 mobile network operators in the UK are Vodafone UK,
Three UK, BTEE and Virgin Media O2.
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‘Virtual' network operators – such as Sky Mobile, Tesco
Mobile, Lebara, Lyca Mobile and iD Mobile – do not own their
own networks and rely on access to a mobile network
operator's network to supply mobile services to their
customers.
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Part way through the Phase 2 investigation, Vodafone and
Three entered into an agreement with VMO2 (Beacon 4.1) which
involves, among other things, the divestment of spectrum to
VMO2 (conditional on CMA approval for the merger). The CMA
has considered the impact of this as part of its assessment.
