Vodafone's Proposed Merger With Three Could Lessen Competition, UK Regulator Says

Vodafone's (VOD) planned merger with Three could substantially lessen competition in both retail and wholesale mobile markets, according to provisional findings by the UK's Competition and Markets Authority (CMA) released Friday.

The regulator said that while the combination would lead to improved network quality and accelerated 5G deployment, it could also lead to higher prices or reduced services for millions of mobile customers and negatively impact smaller telecom providers.

The CMA said it will consult on its findings and potential solutions, including investment commitments and customer protections, before issuing a final decision by Dec. 7.

"We will now consider how Vodafone and Three might address our concerns about the likely impact of the merger on retail and wholesale customers while securing the potential longer-term benefits of the merger, including by guaranteeing future network investments," said Stuart McIntosh, chair of the CMA inquiry group.

Responding to the CMA's provisional findings, Vodafone and Three said Friday that they disagree that the merger would lead to price increase and adversely impact the wholesale market.

The companies said they were confident that they can address the regulator's concerns and looked forward to "working constructively" with the CMA on the various options to resolve concerns.

"By all measures, this merger is pro-growth, pro-customer, pro-investment and pro-competition," the companies said in a joint statement.

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