The competition regulator is commencing a comprehensive inquiry into the £15 billion transaction because the companies failed to reassess the repercussions for mobile phone users.
A competition watchdog has questioned a proposed merger between Three and Vodafone, announcing that it will conduct a comprehensive investigation into the transaction.
The Competition and Markets Authority (CMA) announced the action in response to the companies’ failure to provide any reassurances regarding the potential impact of the proposed plans on mobile phone users, including increased costs and diminished service quality.
Last year, the proposed £15 billion merger was announced. It would unite 27 million consumers under a single provider and establish the largest mobile network in the United Kingdom.
Concerns have been expressed, however, that it will reduce competition among operators, as the regulator previously stated that it had not observed any evidence that the transaction would benefit investment or competition.
The CMA gave the companies five business days to provide “meaningful solutions” to its concerns by the end of last month; failure to do so would have resulted in a protracted, in-depth “phase two” investigation.
The regulator, however, stated in a Thursday statement that Three and Vodafone had “notified the CMA that they would not be providing any undertakings.”
Under the direction of an independent commission, the investigation will last a minimum of twenty-four weeks and may result in the merger being halted.
Vodafone and Three assert that the agreement will enable them to increase investment and compete more effectively with BT/EE and Virgin Media-O2.
The firms issued the following joint statement: “This was an anticipated next stage in the process and is consistent with our established completion schedule.
Vodafone UK and Three UK maintain their conviction that the transaction will foster increased competition within the mobile industry and immediately improve network speed, coverage, and quality for businesses and consumers.
They further expressed their intention to thoroughly examine the potential issues brought up by the CMA and eagerly anticipate maintaining a constructive dialogue with them during the review process.
According to the CMA, Three was formerly “the least expensive of the four mobile network operators.” However, the merger could “reduce competition between mobile operators to win new customers,” which could jeopardise this reputation.
Additionally, the watchdog expressed apprehensions that the agreement could impede smaller “virtual” operators, including Sky Mobile, Lebara, and Lyca, to negotiate favourable terms for their consumers due to the reduction in the number of network operators willing to host them.
