CMA starts investigation into Vodafone and three merger

An investigation into the proposed merger between Vodafone and three was expected, and the Competition Markets Authority (CMA) has now announced that its Phase 1 investigation has started. 

The Phase 1 investigation started after the receipt of initial evidence and information supplied by Vodafone UK and three UK and should last forty working days. The aim of the first phase being to see if the deal will lead to ‘substantial lessening of competition’ and if that seems to be case a more detailed Phase 2 investigation will need to take place.

This deal would bring together two of the major players in the UK telecommunications market, which is critical to millions of everyday customers, businesses and the wider economy. The CMA will assess how this tie-up between rival networks could impact competition before deciding next steps.

We now have 40 working days to complete this formal Phase 1 investigation, before publishing our findings and any next steps.

Sarah Cardell, Chief Executive of the CMA

The UK mobile market comprises the EE, Vodafone, three and O2 networks, so a merger would reduce that to just three distinct networks. In theory, a merged Vodafone and three could mean better network coverage for customers in the medium term, but with a downside of less price competition. The merger could also lead to lower overall coverage levels in the long term as with less competition there is less incentive to build more masts and ensure good levels of coverage exist beyond the legal minimum requirements.