The UK’s Competition and Markets Authority (CMA) has confirmed it will launch a detailed Phase 2 investigation into the proposed merger between mobile operators Vodafone and Three.
The competition regulator had previously raised concerns that the £11 billion ($13.92 billion) transaction could lead to higher consumer prices and reduced investment in the UK’s mobile networks.
In March, the CMA gave Vodafone and Three five working days to propose meaningful remedies to address those concerns, warning that failure to do so would result in a referral for an in-depth Phase 2 inquiry.
In its announcement, the CMA said the merger “may be expected to result in a substantial lessening of competition” in both retail mobile services for consumers and businesses and wholesale mobile services across the UK.
A four-person inquiry group led by Stuart McIntosh will carry out the investigation. The panel also includes Stuart Rose, Ashley Gunn, and Crispin Wright. The CMA has set a statutory deadline of 18 September to publish the group’s findings.
Under the proposal, Vodafone would hold a 51 percent stake in the combined business and CK Hutchison, the owner of Three, would retain 49 percent. Vodafone has argued that the larger scale would let the combined operator compete more effectively with market leaders such as BT and Virgin Media O2.
Both companies contend the merger is pro-competitive and would enable up to £11 billion of investment to accelerate 5G deployment across Britain.
The CMA’s decision to progress to a Phase 2 probe indicates it remains unconvinced by those claims and continues to have concerns about potential harm to competition in the UK mobile market if the deal proceeds as proposed.
(Photo by Markus Winkler)
See also: Nokia and Vodafone test latency-busting technology
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