The UK’s Competition and Markets Authority (CMA) has confirmed it will conduct an in-depth Phase 2 investigation into the proposed merger between mobile operators Vodafone and Three.
The competition watchdog had previously expressed concerns that the £11 billion ($13.92 billion) deal could lead to higher prices for consumers and reduced investment in Britain’s mobile networks.
Last month, the CMA told Vodafone and Three they had five working days to respond with meaningful solutions to its concerns or the deal would be referred for an in-depth Phase 2 investigation.
In a statement today, the CMA warned that the merger “may be expected to result in a substantial lessening of competition” in the markets for retail mobile services to consumers and businesses as well as wholesale mobile services across the UK.
The regulator has established a four-person inquiry group, chaired by Stuart McIntosh, to scrutinise the potential tie-up. The other panel members are Stuart Rose, Ashley Gunn, and Crispin Wright. A statutory deadline of September 18 has been set for reporting the findings.
Vodafone, which would own a 51 percent stake in the merged entity, has argued the increased scale would allow it to compete more effectively against market leaders BT and Virgin Media O2. Three’s owner CK Hutchison would hold the remaining 49 percent share.
Both Vodafone and Three have maintained the merger is pro-competitive and will enable £11 billion of investment in deploying 5G infrastructure across Britain.
However, the CMA’s in-depth probe signals the regulator has not been convinced by the companies’ arguments and still harbours concerns about reduced 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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