The Competition and Markets Authority (CMA) has approved the £16.5 billion merger between Vodafone and Three, paving the way for the creation of the UK’s largest mobile phone operator. The newly merged network will boast over 27 million subscribers, promising significant upgrades to the country’s 5G infrastructure alongside protections for customers.
As part of the deal, Vodafone and Three have committed to investing £11 billion in upgrading their combined network, ensuring wider coverage, faster speeds, and improved connectivity across the UK. The merger, expected to complete in the first half of 2025, also includes short-term protections for customers to mitigate concerns over potential price increases.
Key Terms of the Vodafone and Three Merger
Under the CMA’s legally binding conditions, Vodafone and Three must maintain certain mobile tariffs and data plans for at least three years, including those offered by their sub-brands. Additionally, the companies are required to uphold competitive pricing for mobile virtual network operators (MVNOs) like Sky Mobile, Lyca, Lebara, and iD Mobile, ensuring these brands can continue to offer affordable options to customers.
The CMA’s approval follows concerns raised in September about the potential for higher customer bills. Stuart McIntosh, chair of the CMA’s independent inquiry group, stated, “It’s crucial this merger doesn’t harm competition, which is why we’ve carefully considered the evidence and proposed measures to safeguard the telecoms market.”
Transforming the UK’s Digital Infrastructure
Vodafone CEO Margherita Della Valle celebrated the decision, stating, “Today’s approval releases the handbrake on the UK’s telecoms industry. Consumers and businesses will enjoy wider coverage, faster speeds, and better-quality connections as we build the biggest and best network in the UK.”
Canning Fok, deputy chair of Three owner CK Hutchison, echoed the sentiment, emphasizing that the merger would “transform the UK’s digital infrastructure” and deliver world-class network quality for customers nationwide. CK Hutchison has pledged full support for the investment plan, which was a cornerstone of the CMA’s decision.
Vodafone will initially own 51% of the merged company, with the option to buy out Hutchison’s 49% stake after three years. The merger aims to position the UK at the forefront of global digital innovation by enhancing 5G capabilities while preserving competition in the mobile sector.
CMA’s Oversight and Long-Term Impact
The CMA has worked closely with Ofcom to ensure the merger aligns with public interest. Both organizations will oversee the implementation of legally binding commitments, guaranteeing that the promises made by Vodafone and Three are fulfilled.
McIntosh added, “Having reviewed extensive feedback, we believe the merger is likely to boost competition in the UK mobile sector. Our measures will enhance the UK’s 5G capability while preserving effective competition.”
Originally announced in 2023, the merger faced significant opposition from competitors like BT and Virgin Media O2. However, the CMA concluded that the long-term benefits of improved infrastructure and enhanced competition outweigh the risks, provided the agreed safeguards are implemented.
With 64% of UK adults relying on mobile connectivity for daily activities, this merger marks a pivotal moment in the evolution of the nation’s digital landscape.
