Following an investigation in January into the huge telecoms merger, the Competition and Markets Authority (CMA) provisionally found that customers would have to fork out more and some would get a reduced service with smaller data packages in their contracts.
The investigation into the deal, which would bring 27 million customers under one network provider, began in January and looked into the pricing for customers and what impact it would have on the current marketplace.
With Vodafone and Three joining forces, there would be one less operator, so mobile virtual network operators including Sky, Lyca Mobile and Lebara would not be able to get terms that are as competitive. The knock-on effect is they would have less financial room to make better deals for their customers.
The quality of the 5G network promised in the merger has also come under scrutiny, with the CMA believing the claims are “overstated” by the two companies.
Vodafone and Three have insisted the partnership would lead to “best-in-class 5G to every community, school, and hospital in the country”.
One of the merger’s goals as part of an £11bn investment is to lift the UK’s ranking for 5G in Europe, which it noted languishes in 22nd place out of 25 and the lowest in the G7.
Stuart McIntosh, chair of the inquiry group leading the investigation, said: “We’ve taken a thorough, considered approach to investigate this merger, weighing up the investment the companies say they will make in enhancing network quality and boosting 5G connectivity against the significant costs to customers and rival virtual networks.
“We will now consider how Vodafone and Three might address our concerns about the likely impact of the merger on retail and wholesale customers while securing the potential longer-term benefits of the merger, including by guaranteeing future network investments.”
The mobile giants have until 4 October to give a response to the initial findings, but they did not waste any time in defending their mega-deal merger.
‘We do not agree with CMA’s provisional finding’
In a lengthy statement, Vodafone and Three wrote: “We do not agree with the CMA’s provisional finding that prices will increase. From the outset, we have been very clear that the merger will not affect our pricing strategy and that all social tariffs will continue to protect the vulnerable.
“Importantly, the investment case underpinning the merger is not based on hypothetical price increases and the CMA’s price rise assumptions are contrary to the business and investment plans the parties have signed up to for the merged company.”
The final report on the merger will be issued on 7 December.
Ahead of decision time on the huge deal, Robert Finnegan, chief executive of Three UK, said: “We are determined to reassure the CMA in relation to their provisional concerns and work with them to secure the extensive benefits this merger brings for UK customers, businesses and wider society.”
