After a whole lot of deliberation the Competition and Markets Authority (CMA) has approved a merger between Three and Vodafone – a merger that will create the UK’s biggest mobile network, with 27 million customers.
The merger – which was proposed 18 months ago – comes with some strings attached though, as this combined network has committed to investing £11 billion into improving their network over the next eight years.
The two companies also committed to capping select mobile tariffs and data plans for three years, to protect Three and Vodafone customers from price increases in the short term. And they’ve also committed to offering pre-set prices and contract terms to MVNOs (mobile virtual network operators) for the next three years, so that these networks can get competitive wholesale prices.
A new network for 2025
This new combined network is expected to formally launch in the first half of 2025, with Vodafone initially owning 51% of the equity, with the option “subject to certain conditions” to acquire the remaining 49% after three years.
Vodafone claims that this merger will improve competition and bring “significantly better quality, greater reliability and enhanced capacity” to the merged network, as well as benefitting O2, as Vodafone and O2 have a network sharing agreement.
Margherita Della Valle, Vodafone Group’s CEO, said: “Today’s decision creates a new force in the UK’s telecoms market and unlocks the investment needed to build the network infrastructure the country deserves.
“Consumers and businesses will enjoy wider coverage, faster speeds and better-quality connections across the UK, as we build the biggest and best network in our home market.
“Today’s approval releases the handbrake on the UK’s telecoms industry, and the increased investment will power the UK to the forefront of European telecommunications.”
So this could prove beneficial to the UK’s mobile landscape, but it will leave customers with less network choice than they once had, as now the only true networks will be this new merged one, EE (which itself merged with BT not so long ago), and Virgin Media O2.
