The Competition and Markets Authority will launch an investigation into Vodafone and Three’s proposed deal. Matthew Partridge reports
The planned £15bn merger between Vodafone and Three could be derailed after the competition watchdog said it intends to launch a major investigation into the deal, says Daniel Binns on Sky News. The Competition and Markets Authority (CMA) has already taken a first look, and last month it asked both firms to respond with “meaningful solutions” to concerns that a tie-up would reduce competition. But as Vodafone and Three have failed to do so, the CMA has decided to go ahead with a “lengthy, in-depth” examination, which will take at least 24 weeks and could result in the merger being blocked.
Despite the CMA’s actions, both companies aren’t backing down, says James Warrington in the Telegraph. They remain “confident the deal would bring benefits for consumers”. They argue the tie-up “is needed to give them the scale to compete with larger rivals EE, owned by BT, and Virgin Media O2”. Indeed, in an attempt to reduce concerns about degraded service, they have pledged to invest £11bn in their combined 5G mobile network once the deal has completed. What’s more, Three, which recorded its first loss in 13 years in 2023, has warned its finances may prove “unsustainable” if the merger is blocked.
Subscale operators?
Cynics are already arguing that Three’s losses are a timely “sob story” that “plays to the CMA gallery”, says Alistair Osborne in the Times. But the two companies do have a point when they argue that they are currently “subscale”. This is particularly true given they are facing “big investments” for advanced 5G networks, which will be vital for delivering “everything from AI to NHS remote-patient monitoring�
