A pedestrian walks past a Vodafone store in central London on May 16, 2023. British mobile giant Vodafone plans to cut 11,000 jobs over three years in the latest cull to hit the technology sector, with new boss Margherita della Valle criticizing recent performance.
Adrian Dennis | AFP | Getty Images
The UK competition regulator on Thursday referred the proposed merger between Vodafone and CK Hutchison's Three Mobile Network for an in-depth investigation.
The Competition and Markets Authority said, with the information currently available to it, “it is expected that the transaction will significantly reduce competition within the UK market or markets.”
In late March, the Capital Markets Authority submitted Vodafone And C. K. Hutchison Five business days to reach “meaningful solutions” to the regulator’s concerns or face an in-depth investigation.
The CMA has given itself a deadline of September 18 to complete the in-depth investigation, also known as a phase two investigation.
The CMA previously said the deal could result in customers facing higher prices and lower quality, reducing competition in the UK mobile phone market. Regulators argued that the deal could also result in so-called mobile virtual network operators, which rely on Vodafone and Three's infrastructure, being unable to negotiate good deals for their users.
The regulator's process hinges on a decision on whether the deal would result in a “substantial lessening of competition” (SLC) in the market. The CMA can liquidate the deal in the absence of an SLC or seek damages from companies to address their concerns.
The Vodafone and CK Hutchison deal, announced last year, will merge the two brands' UK businesses, giving Vodafone a 51% controlling stake and leaving CK Hutchison with a minority stake.
The combination of Vodafone's UK business and Three UK will reduce the number of mobile operators in the country to just three, following significant consolidation in the telecoms sector in the past few years.
Vodafone and 3 said in a joint statement that the investigation was an “expected next step” and “is in line with the time frame for completion” that the two companies had set from the beginning.
The two mobile networks said they “remain confident that the deal will drive stronger competition in the mobile sector and give customers and businesses a step-change in network quality, speed and coverage from day one.”
Vodafone and 3 confirmed that “there will be no change in the pricing strategy of each operator as a result of the merger.”
The Capital Markets Authority opened an antitrust investigation into the merger in January.
