The UK’s Competition and Markets Authority (CMA) gave a strong indication it will approve Vodafone and 3 UK’s tie-up, with its decision largely dependent on the companies following through on pledges that address competition concerns.

The regulator stated that following an investigation, it had provisionally found a commitment by the merged company to invest €11 billion to upgrade its network, including the rollout of 5G and short-term customer protections, could address concerns it raised in September.

CMA’s latest announcement signals its stance on the merger has softened significantly after it warned of potential negative effects for consumers and MVNOs just two months ago, while arguing the benefits outlined by the pair about their proposed 5G investment were being overstated.

The companies responded by stating the merger was a “once-in-a-generation opportunity to transform UK digital infrastructure with £11 billion of network investment”, while making other commitments around the retail and wholesale segments of the market.

However, while the signs are now more positive, there is still work to do. CMA has set out a Remedies Working Paper to seek feedback from the wider industry on the pair’s package, before it makes a final decision on 7 December.

Proposed remedies include retaining certain existing mobile tariffs and data plans for three years and setting pre-agreed prices on a wholesale basis for MVNOs. Their joint network investment plan must also be delivered over the next eight years and will be subject to legal scrutiny by Ofcom and the CMA.

Responding to the CMA’s latest announcement, the two companies stated they will study the Working Paper in detail, adding that from what has been communicated so far, “we believe it provides a path to final clearance”.

Order the champagne
Kester Mann, director of consumer and connectivity at CCS Insight, said the two companies can “tentatively order the champagne” as their joint venture appears to have taken a big step forward.

He added approval would mark one of the most significant developments in the history of UK mobile, but warned CMA’s statement won’t be welcomed by all.

“BT and Sky Mobile have sternly opposed the deal and are likely to vociferously attempt one final time to have it blocked before the CMA’s final deadline in less than five weeks,” said Mann.