Competition watchdog approves Vodafone and Three mega merger
The competition watchdog has approved Vodafone’s blockbuster £16.5bn merger with CK Hutchison’s Three UK, creating Britain’s biggest mobile operator.
In a statement on the London Stock Exchange, Vodafone described the deal as a “once-in-a-generation opportunity to transform the UK’s digital infrastructure,” while chief executive Margherita Della Valle hailed the creation of a “new force” in the telecoms market.
It follows nearly 18 months of deliberation from the Competition and Markets Authority (CMA), which had previously warned that the merger could lead to higher bills for tens of millions of customers.
The CMA signalled last month it would support the deal if both firms committed to delivering on an £11bn plan to upgrade the merged group’s UK network.
Vodafone and Three pledged on Thursday to invest £11bn and create “one of Europe’s most advanced 5G networks,” which would reach over 50m customers. A statement confirmed the pledge would require no public funding.
The CMA’s inquiry group chair, Stuart Mcintosh, said: “After extensive feedback, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed, but only if Vodafone and Three agree to implement our proposed measures.”
Vodafone’s Margherita Della Valle said consumers and businesses would enjoy “wider coverage, faster speeds and better-quality connections across the UK,” folllowing the tie-up.
“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.”
Canning Fok, deputy chairman of CK Hutchison and chairman of CK Hutchison Group Telecom Holdings, said: “We have been operating telecoms businesses in the UK for over three decades and Three UK for the past two.
“We have invested in the people and the infrastructure, helping to bring the benefits of mobile connectivity to UK businesses and consumers.
Fok added: “When Three and Vodafone are combined, CK Hutchison will fully support the merged business in implementing its network investment plan, the cornerstone of today’s approval by the CMA, transforming the UK’s digital infrastructure and ensuring customers across the country benefit from world-beating network quality.”