The UK Competition and Markets Authority (CMA) cleared a merger of 3 UK with Vodafone Group’s unit in the country, subject to meeting commitments around network investment and capping prices on certain tariffs for three years.     

Approving the union, the regulator stated an eight-year network upgrade and integration plan devised by the operators, combined with short term pledges on some retail and wholesale pricing, had resolved its initial concerns.

The operators have pledged to invest £11 billion in what Vodafone claims will become one of Europe’s most advanced 5G networks.

Communications regulator Ofcom and the CMA are set to oversee delivery of the plan.

The CMA noted the independent group assessing the proposal concluded the network upgrades “would boost competition between the mobile network operators in the long term, benefitting millions of people”.

Along with capping selected mobile and data tariffs for three years, the pair are obliged to offer pre-set prices and terms for wholesale services for the same period, a move designed to ensure MVNOs “can obtain competitive terms and conditions as the network plan is rolled out”.

During the approvals process, Vodafone also inked a deal to sell some spectrum to rival Virgin Media O2 should the combination with 3 UK be given the go-ahead, in an apparent attempt to allay competition concerns.

Investment
Predictably, Vodafone and 3 welcomed the CMA’s decision, and in a joint statement highlighted they would engage with the regulator to put the required measures in place.

Vodafone Group CEO Margherita Della Valle said the approval “releases the handbrake on the UK’s telecoms industry and the increased investment will power the UK to the forefront of European telecommunications”.

Deputy chair of 3 parent CK Hutchison Canning Fok added it would “fully support the merged business in implementing its network investment plan…transforming the UK’s digital infrastructure and ensuring customers across the country benefit from world-beating network quality”.

The deal was announced in June 2023 and is expected to close in H1 2025.

Vodafone is set to own 51 per cent of the combined company, with CK Hutchison the remainder. Vodafone has an option to buy its partner out three years after completion subject to conditions.