Vodafone clashes with UK’s competition watchdog over Three merger

Vodafone and Three revealed plans to merge their UK-based operations in June last year, creating the biggest mobile network in the UK with around 27 million customers.

But the CMA provisionally concluded on Wednesday that such a deal would lead to a “substantial lessening in competition”.

In addition to worries over price and service levels, the regulator is also concerned that the deal may make it more difficult for smaller players such as Lyca Mobile, Sky Mobile and Lebara – who rent space from the bigger operators – to get a good deal.

Vodafone and Three have said the tie-up would lead to an additional investment of £11bn in the UK.

The CMA found that a merger of the two could improve the quality of mobile networks and accelerate next generation 5G networks and services, as claimed by the companies.

But it considered these claims were “overstated”, and that the merged firm would not necessarily have the incentive to carry out planned investment after the merger.

In a statement, Vodafone and Three said they disagreed with the CMA’s findings.

“By all measures, the merger is pro-growth, pro-customer and pro-competition. It can, and should, be approved by the CMA,” they said.

The CMA will issue a final report into the deal in December.

The firms added they would be working with the regulator to secure approval for the tie-up.