Three and Vodafone’s $19B merger hits the skids as UK rules the deal would adversely impact customers and MVNOs
Three and Vodafone’s planned $19 billion merger hits the skids as UK rules the deal is likely to reduce competition.
The U.K.’s antitrust regulator has delivered its provisional ruling in a longstanding battle to combine two of the country’s major telecommunication operators.
The Competition and Markets Authority (CMA) says that Three and Vodafone’s planned $19 billion merger — announced 15 months ago — could lead to higher prices for consumers, diminished service such as smaller data packages in contracts, and reduced investment in U.K. mobile networks.
The CMA also took aim at the market for mobile virtual network operators (MVNOs) — a set up aimed at increasing competition by enabling new carriers to set up and offer services without building all of their own costly communications infrastructure. Both Three and Vodafone supply network to MVNOs, with the list including iD Mobile and Lebara. The CMA said that a merger might make it more difficult for MVNOs to access reasonable wholesale deals, in turn making services more expensive for customers.
Competition concerns aside, there was at least one other potential roadblock to this merger. Three is owned by CK Hutchison Holdings, a Hong Kong conglomerate subject to a national security law introduced by China in 2020, leading some to argue that Three could be compelled to share sensitive data with the Chinese state. The U.K. had introduced the National Security and Investment Act back in 2022 to cover such scenarios, and the government had previously used this law to block other deals between U.K. entities and Chinese companies.
However, back in May the U.K. government greenlighted the Three / Vodafone merger on security grounds, with some provisions, leaving the remaining regulatory concerns firmly in the CMA’s domain.
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