The UK Competition and Markets Authority (CMA) has approved the merger of Vodafone and Three, paving the way for the creation of one of the UK’s largest mobile network providers. The final approval is subject to legally binding commitments intended to protect consumers and promote competition while enabling substantial investments in the country’s digital infrastructure. The decision by the British antitrust regulator comes after an in-depth investigation.
Key conditions of Vodafone-Three merger approval
Under the terms of the agreement, Vodafone and Three are required to meet a series of legally binding commitments designed to improve the UK’s mobile network infrastructure and protect customers. The companies have pledged to invest £11bn over eight years to deliver a comprehensive network plan focused on creating one of Europe’s most advanced 5G networks. This initiative is expected to extend coverage to 99% of the UK population and significantly enhance network quality for more than 50 million customers.
To safeguard consumers during the initial phase of the merger, selected mobile tariffs will be subject to price caps for a period of three years. This measure seeks to prevent immediate price increases as the network integration progresses. Additionally, the merged company will ensure fair terms for smaller mobile operators by offering pre-set pricing and contractual conditions for wholesale services. These protections, also set for three years, aim to maintain competitive access for virtual network providers.
Oversight will be shared between the CMA and Ofcom, with the merged company required to publish annual progress reports. The CMA will monitor compliance with both consumer and wholesale protections.
In its earlier findings, the CMA raised concerns that the merger could result in higher prices and less favourable terms for mobile virtual network operators (MVNOs). Following consultations and input from Ofcom, the regulator concluded that the proposed remedies would effectively address these issues. The CMA stated that the upgraded network would enhance long-term competition among mobile operators, ultimately benefiting consumers and businesses by improving service quality and capacity.
Vodafone and Three have described the merger as transformative, creating a telecoms giant that will play a pivotal role in advancing the UK’s digital infrastructure. “Today’s decision creates a new force in the UK’s telecoms market and unlocks the investment needed to build the network infrastructure the country deserves,” said Vodafone Group CEO Margherita Della Valle. “Consumers and businesses will enjoy wider coverage, faster speeds and better-quality connections across the UK, as we build the biggest and best network in our home market.”
The combined entity will control 46% of the UK’s mobile spectrum and serve 27 million customers. The merged company’s investment is expected to accelerate the rollout of 5G technology, which is deemed essential for supporting innovations in areas like artificial intelligence (AI), public services, and digital inclusion. The companies claim the merger represents a “once-in-a-generation” opportunity to elevate the UK’s connectivity to European standards, contributing to economic growth and narrowing the digital divide.
The merger, subject to the final implementation of CMA-mandated undertakings, is expected to be completed in the first half of 2025. Vodafone will hold a 51% stake in the new entity, while Hutchison, the owner of Three, will retain 49%. After three years, Vodafone may acquire Hutchison’s share under specific conditions.
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