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UK’s CMA Launches Phase 2 Investigation into Vodafone and Three UK Merger

 |  March 24, 2024

The United Kingdom’s Competition and Markets Authority (CMA) has officially initiated a formal “phase 2” investigation into the proposed merger between telecommunications giants Vodafone and Three UK. This move comes amidst concerns that the merger could potentially result in increased prices for consumers and a negative impact on future infrastructure investments.

Julie Bon, the CMA’s deputy chief economic adviser, expressed apprehensions about the deal, stating, “Our initial assessment of this deal has identified concerns which could lead to higher prices for customers and lower investment in U.K. mobile networks.” Bon emphasized that unless Vodafone and Three UK present viable solutions to address these concerns, an in-depth investigation will proceed.

The $19 billion merger plan, which surfaced approximately nine months ago, aims to reduce the number of major mobile network operators in the UK from four to three, with EE and O2 being the remaining competitors. Recognizing potential regulatory hurdles, Vodafone and Three UK had allotted until the end of 2024 to finalize the transaction.

The phase 1 probe, initiated in January, involved market analysis to gather feedback from various stakeholders. Following this preliminary investigation, the CMA determined that a deeper examination was warranted, leading to the launch of the phase 2 investigation.

Read more: EU Approve Vodafone-CK Hutchison £19 Billion Merger in the UK

Tom Smith, a partner at London-based law firm Geradin Partners and former legal director at the CMA, commented on the expected regulatory scrutiny, stating, “It was inevitable that this case would be given an in-depth assessment by the CMA.” He noted that the companies now face the challenge of demonstrating the merger’s benefits to the CMA panel.

The CMA has a six-month window to conduct the phase 2 investigation before reaching a final conclusion. As stakeholders await further developments, the outcome of this investigation will significantly influence the landscape of the UK’s telecommunications sector.

Source: Tech Crunch