The proposed merger of UK telco giants Vodafone and Three draws ever closer, with the Competition and Markets Authority (CMA) publishing a list of remedies to its objections to the tie-up’s potential to distort the UK telecoms market. The UK government has already green lit the merger.
In its recommendations, the CMA has provisionally found that a multi-billion-pound commitment to upgrade the merged company’s network across the UK, including the roll-out of 5G, combined with short-term customer protections could solve competition concerns identified in September and allow the merger to go ahead.
The CMA investigation – led by an independent inquiry group – provisionally found in September that the merger could lead to higher prices for customers and harm the position of mobile virtual network operators, such as Sky Mobile, Lyca, Lebara and iD Mobile. The CMA also consulted on potential solutions to address its concerns – known as remedies.
The CMA has today set out a Remedies Working Paper to seek views on the effectiveness of a proposed remedy package.
It provisionally finds that a legally binding commitment to undertake the network integration and investment programme proposed by Vodafone and Three would significantly improve the quality of the merged company’s mobile network, boosting competition between mobile network operators in the long term and benefiting millions of people who rely on mobile services.
The CMA also found that short term protections would be needed to ensure that retail consumers and mobile virtual network operators can continue to secure good deals during the initial years of network integration and investment roll-out.
The remedies proposed today would require Vodafone and Three to:
- Deliver their joint network plan – which sets out the network upgrade and improvements they will make through significant levels of investment over the next 8 years across the UK. This would be a legal obligation overseen by both Ofcom – the telecoms regulator – and the CMA
- Commit to retain certain existing mobile tariffs and data plans for at least 3 years, protecting millions of current and future Vodafone / Three customers (including customers on their sub-brands) from short-term price rises in the early years of the network plan
- Commit to pre-agreed prices and contract terms to ensure that Mobile Virtual Network Operators can obtain competitive wholesale deals.
Stuart McIntosh, chair of the inquiry group leading the investigation, said: “We believe this deal has the potential to be pro-competitive for the UK mobile sector if our concerns are addressed. Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger.”
A legally binding network commitment would boost competition in the longer term and the additional measures would protect consumers and wholesale customers while the network upgrades are being rolled out.
Today’s announcement is provisional, with a final decision due before the 7 December statutory deadline. The inquiry group is inviting feedback on today’s announcement by 5pm on 12 November.
Vodafone and Three respond
Vodafone and Three say in a statement that they welcome the CMA’s recognition that the significant improvements innetwork quality delivered by their Joint Network Plan will, “boost competition between mobile network operators in thelong term and benefit millions of people who rely on mobile services.”
The merger is a once-in-a-generation opportunity to transform the UK’s digital infrastructure – which lags significantly behind its European peers – and for more than 50 million UK customers to benefit from a vastly better mobile experience.
Vodafone and Three will need to study the Working Paper in detail. From what the CMA has communicated so far this morning, we believe it provides a path to final clearance.
An appropriate balance appears to have been struck by ensuring that the significant benefits of the merged company’s investments can be realised in full and at pace to the benefit of the country and its citizens, while addressing the CMA’s stated concerns. However, it is essential that balance is preserved through to the end of the process, reflecting that the Parties have offered extensive remedies, including by making their future network roll-out fully enforceable.
The merger will be a catalyst for positive change. It will bring significant benefits to businesses and consumers throughout theUK, and it will bring advanced 5G to every school and hospital across the country. The merger is also closely alignedwith the Government’s mission to drive growth and to encourage more private investment in the UK. As the Governmenthas recognised, high quality digital networks are pivotal to this1, as all countries’ future prosperity and technological advancement will be underpinned by world-class connectivity.
Wider industry reaction
Keith McAleese, Head of TMT at NTT DATA UK&I, says: “This merger brings the best of both worlds to the table—Vodafone’s strength in B2B solutions and Three’s agility in mobile infrastructure. For the UK’s business and consumers, this is a big win. Vodafone’s capabilities, from digital channels to white-label product development, will fast-track new services and capabilities to Three’s customer base, addressing the rising demand for rapid, data-intensive applications.
“This joint venture won’t just lead to improved connectivity; it will also empower enterprises to act on their digital strategies at speed. The telecoms sector hasn’t always been able to roll out B2B services as swiftly as consumer offerings, but the stakes have changed. In healthcare, finance, and logistics—industries where connectivity underpins every operation—there’s now potential to integrate reliable 5G at the scale needed for AI, IoT, and edge computing initiatives. This merger’s legally binding commitments should reassure business customers that network quality will be maintained, not just in metropolitan centres but also in rural areas.
“The CMA’s requirements for fair MVNO terms are also crucial. These provisions create space for innovation, allowing MVNOs to serve niche enterprise markets on a secure, scalable network without losing commercial flexibility. The merger sets a new standard for enterprise connectivity and marks a milestone in positioning the UK as a leader in digital infrastructure.”
The CMA’s final decision on the merger is due on or before 7 December, and we will continue to positively engage with themto resolve any outstanding matters and secure approval.
