Vodafone, Three merger on brink of in-depth investigation

Merger under scrutiny: The proposed merger between Vodafone's UK branch and Hutchison's Three UK unit faces potential scrutiny from Britain's antitrust regulator unless urgent remedies are provided.

Consumer choice concerns

The antitrust watchdog expressed concerns that the $19 billion deal announced last year could negatively impact consumers, reducing the number of mobile network options from four to three. This reduction is expected to trigger a comprehensive investigation, as historically, a minimum of four networks has been deemed necessary to maintain competitive pricing.

Pricing concern ultimatum

The Competition and Markets Authority (CMA) has given Vodafone and Three five working days to present viable solutions addressing worries about potential price hikes for consumers and businesses, as well as decreased investment.

Julie Bon, the regulator's Phase 1 decision-maker, stated that despite claims by Vodafone and Three regarding the deal's benefits for competition and investment, the CMA has yet to see convincing evidence supporting these assertions. Consequently, unless meaningful solutions are provided promptly, an in-depth investigation will be initiated.

The detailed examination, referred to as a "phase 2" investigation by the CMA, could last up to 24 weeks, with the possibility of an eight-week extension.

5G infrastructure investment

As part of the merger agreement, the companies committed to investing £11 billion ($13.87 billion) in 5G network infrastructure, aligning with the government's objective to enhance Britain's telecommunications.

Vodafone and Three argued that this investment would accelerate the rollout of new technology, ultimately benefiting consumers.

(With Reuters Inputs)