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The UK Competition and Markets Authority (CMA) has issued a warning to Vodafone and CK Hutchison’s UK brand Three, giving them five working days to provide a “resolution” to their concerns through a joint process. Failure to do so will result in an in-depth investigation of the transaction.
The CMA launched an investigation into the merger in January, citing concerns it could reduce competition and lead to higher prices for these customers and disadvantages for mobile virtual network operators (MVNOs).
The merger, announced last year, will combine the UK operations of Vodafone and CK Hutchison; Vodafone will hold a 51% controlling stake and CK Hutchison will retain a minority stake. Among the concerns expressed by the CMA is that competition between mobile operators will decrease, which will negatively affect consumer choice and cause prices to rise again.
The CMA also highlights the challenges faced by MVNOs such as Sky Mobile, Lebara and Lyca Mobile, who may need to negotiate effectively with customers if they act together. Major MVNOs currently use services from Vodafone and We.
In response to the CMA announcement, Vodafone and We have confirmed that there are next steps in the regulatory process. They are confident about the benefits the merger will bring to competition, consumers and the UK telecommunications industry.
Vodafone CEO Ahmed Essam said the merger will enable the combined organization to compete effectively with industry leaders such as IT and IT. While Virgin Media O2 (VMO2) offers MVNOs more options in wholesale.
Our CEO, Robert Finnegan, echoed the same sentiment, saying the merger would put the UK on the fast lane to benefit customers and compete. He emphasized the need for a third player with the necessary scale to invest in network innovation.
The CMA’s final report into the mergers investigation highlights the importance of resolving competition issues to benefit UK public consumption and business transactions.