Vodafone’s £16.5bn merger with rival Three has been officially approved by the UK’s Competition and Markets Authority (CMA), with assurances that it will not lead to higher mobile prices for customers. The deal will create the UK’s largest mobile network, serving 27 million customers.
Margherita Della Valle, CEO of Vodafone, confirmed on BBC Radio 4’s Today programme that the merger will be “self-funded,” meaning it won’t require public funding or lead to additional costs for consumers. The CMA had previously raised concerns that the merger could result in higher prices, but has since concluded that the merger is likely to boost competition in the mobile sector, making the deal viable under certain conditions.
To address pricing concerns, the CMA has required the merged companies to cap certain mobile tariffs and invest billions into the UK’s 5G infrastructure. While the specific price plans to be protected and the duration of the caps have not been detailed, this move is intended to safeguard current and future customers from price increases during the early stages of the merger’s implementation.
A Landmark Moment in UK Mobile Industry
Industry analysts have described the merger as a significant turning point for the UK’s mobile market. Kester Mann from CCS Insight called it a “landmark moment,” noting that the deal strikes a balance between fostering competition and driving much-needed investment in mobile networks. Paolo Pescatore, another analyst, cautioned that it will take years to fully assess the merger’s impact, stressing that it is now up to both companies to fulfill their promises to consumers and the UK economy.
The merger follows a series of similar consolidation moves in the UK mobile industry. In 2010, the merger of Orange and T-Mobile formed EE, which was later acquired by BT. In 2021, the CMA also approved the £31bn merger between Virgin Media and O2. These deals have often been accompanied by job cuts, with EE reducing its workforce by over 1,700 positions after its merger.
However, Vodafone and Three have suggested their tie-up will create thousands of new jobs, marking a potential contrast to past industry consolidations.