The proposed merger of mobile network operators Vodafone and Three is expected to result in higher pricing and fewer services, the UK competition watchdog has warned.
However, the companies are being asked to suggest measures to prevent such a negative impact.
The Competition and Markets Authority (CMA) launched an inquiry into the merger in October last year, and in its most recent progress update, it stated that “tens of millions” of mobile users may see their mobile package prices rise or services as data allowances decrease.
The CMA also discovered that the wholesale sector, in which virtual operators such as Sky Mobile or Tesco Mobile resale airtime from the four network carriers, Vodafone, Three, O2 and EE, may see worse pricing when competition reduces from four to three suppliers.
In a joint statement, Vodafone and Three responded to the regulator, saying they disagreed with a number of the CMA’s findings and that a merger would fix the country’s “dysfunctional mobile market” and “unleash more competition and investment”.
Margherita Della Valle, CEO of Vodafone, stated, “Our merger is a catalyst for transformation.
“It is time to release the brakes on the country’s connectedness and develop the world-class infrastructure it deserves. We are presenting a self-funded proposal to boost economic growth and bridge the UK’s digital divide.”
The CMA acknowledged that the merger could improve mobile network quality and accelerate the deployment of next-generation 5G networks and services but added that it “currently considers that these claims are overstated and that the merged entity would not necessarily have the incentive to follow through on its proposed investment programme”.
Matthew Howett, CEO of telecoms analyst Assembly Research, called it “fanciful” that the CMA would approve a merger of this scale without any remedies to address competition concerns.
We earlier reported that The British Competition Commission has announced that it has approved the adjustments that Facebook parent company Meta has suggested to the way it handles advertisement data on its social media networks.
