Competition Watchdog Delays Three UK and Vodafone Merger Decision
The Competition and Markets Authority (CMA) has announced that it will need an additional 8 weeks to reach a conclusion on their Phase 2 investigation of the proposed mega-merger (here) between mobile operators Three UK and Vodafone. As a result, the deadline has been extended from 18th September 2024 to 7th December 2024.
The merger, which would see Vodafone retain a 51% slice of the business and CK Hutchison (Three UK) hold 49%, has previously been promoted by the parties as something that would be “great for customers, great for the country and great for competition,” while also resulting in a major £11bn investment to upgrade the UK’s 5G mobile (broadband) infrastructure and network coverage.
Despite this, the first phase of the CMA’s investigation raised some concerns earlier this year, not least over the potential reduction in market competition and the potential for consumers to pay higher prices (here). Since then, the competition watchdog has been busy conducting a deeper Phase 2 investigation.
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However, the general complexity of all this and some delays with data requests, as well as the recent network sharing deal between O2 (Virgin Media) and Vodafone, has meant that it will now take longer for the CMA to reach a final conclusion.
The CMA published a notice of extension to the original reference period on 10 May 2024, made pursuant to section 39(4) of the Act, as a result of the failure by CK Hutchison to comply with the requirements of a notice under section 109 of the Act (the section 109 notice) issued on 17 April 2024, requiring it to provide documents and information specified in the section 109 notice.
The notice of extension was cancelled on 3 June 2024 following compliance by CK Hutchison with the section 109 notice and the original reference period was extended by 24 days (the revised reference period) and was due to expire on 12 October 2024.
The Inquiry Group now considers that it will not be possible to complete the investigation and to publish its final report within the revised reference period.
In coming to that conclusion, the Inquiry Group has had regard to the following combination of factors, appreciating also the need to be as comprehensive, thorough, and fair as possible within the tight statutory timeframe:
(a) The very wide scope of this inquiry and the technical and regulatory complexity of the sector, which has required the CMA to acquire a detailed technical understanding of the operations of the mobile network operators (MNOs), mobile ‘virtual’ network operators, and the network sharing agreements between the MNOs;
(b) The amount of technical material (including a Joint Business Plan and Joint Network Plan for the Merged Entity underpinned by detailed economic modelling) provided by the Parties in support of their submissions regarding their ability and incentive to realise efficiencies – in particular, the Parties’ Merger simulations and sensitivity analysis (these were provided at such a time that the Inquiry Group was not able to take this evidence into account for the purposes of working papers shared with the Parties, but will need to be considered in the Provisional Findings);
(c) The public announcement on 3 July 2024 (after the Main Party Hearings) of the new Beacon 4.1 agreement between Vodafone Limited and VMED O2 UK Limited,3 which will require the Inquiry Group to assess the implications of the agreement, including gathering and analysing further evidence from third parties; and
(d) The need to complete the CMA’s econometric estimation of consumer demand for mobile services, which is based on granular and voluminous third-party data.
The new date is a hard deadline and the CMA notes that its report may yet be published before 7th December 2024.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Funny how Three are switching off 3G – reducing service for me – while holding back on 5G installation – of which there is none within several miles, and very little in total in the whole county.
Yet a miracle will occur if they merge with Vodafone. Which has always been terrible in the county. (Partner had to switch away from Vodafone as it was so bad.)
I just do not trust either of them. All I want is decent coverage, please.
What about EE? 1pMobile is great value for the EE network.
As a Vodafone customer, I’ve noticed the network has degraded since the 3G switch off and I spend a lot more time on Edge (even on the A4 in Hammersmith) If Vodafone and Three do merge I have no confidence in how the new entity will configure their masts – I think there’ll be several years of pain until the merger is complete.
As an ex-Vodafone customer I agree. They happily switched off 3G here and the network degraded so hard they actually released me from my contract without penalty. Yes there’s some 4G signal, but as there’s no capacity if you actually try and use it you’ll be flipped over to 2G/EDGE.
As for the merged entity – Three have 5G in the area, however there are gaps, about 3 or 4 masts worth, so, all being well, if Three can add 5G to them before the merger goes through it should be fine. If not, as Vodafone certainly won’t bother (their nearest 5G right now is miles and miles away and there’s evidently nothing planned to change this, other than the merger), then it’s going to be painful.
I was on Vodafone and found the same – constant dropping to, and sticking on, 2G/EDGE immediately after the 3G switch-off. I gave them six weeks or so to iron out any problems, and when it was still happening, I jumped ship (to EE, whose 3G switch-off had also happened but doesn’t seem to have had the same issues). Thankfully I was with Voxi, so I didn’t have a contract to be released from.
EE is a lot better all round. I was already slightly irritated with Vodafone, who seem to have deployed lots of 5G across the western half of the country with a very minimal service on the eastern side and no apparent plans to change it. EE are actually working across the whole country, which makes a nice change after years of the Vodafone split.
The reason for the western rollout is that that’s the part of the UK Vodafone manage under the Vodafone/O2 Cornestone site sharing agreement. The east of the country is managed by Slow2.
Yes, me too, and often in areas I used to get perfectly decent 4G. The quality of Vodafone has become worse and worse and it started a rapid decline when they turned off 3G – I was not using the 3G network before so something else happened alongside that, but Vodafone insist not and blame my device. Being stuck on 2G Edge is common.
Trouble is, I see it on all my devices, all over the country since I do not have a single device to begin with…
Hi Tinker/MissTuned,
Absolutely agree with all your comments and will be moving to EE later this year. Whilst EE is significantly more expensive than Vodafone for SIM Only deals, I think you get what you pay for. If the merger goes ahead the network quality will be horrendous – Vodafone haven’t ironed out any of their mast issues since the 3G switch off it’s shameful. I’m seeing so much Edge and I’m not far from London!
Hi DD,
Have a look at 1p Mobile – they are a decent EE MVNO. I went with EE directly in the end but 1p has full access to the EE network and cheaper pricing (it compares well with Vodafone).
The only problem with EE is band 20 is only 5ghz making it hard to penetrate building and rural areas. we have been to Thetford forest recently and both 4G and EE had no signal and no useful data at all, fortunately phone calls still made through.
I really don’t want this merger to go ahead. Vodafone will ruin three.
and right now, three are the only network that I can think of that actually give you a routable working public IP without the CGNAT. VF would kill that. Voda also can’t be bothered to deploy actual 5G and instead think DSS is fine.
If the merger goes through – the both networks will improve. Three customers will have access to Vodafone masts and Vodafone customers will have access to Three masts which will improve network speeds, coverage, and more while reducing technical debts and have far better budgeting costs.
Please don’t let this go through
I’m with Vodafone and can’t fault the service. Having moved from 3 who provided the worst Internet and customer service possible, I don’t want to have anything to do with 3
The people above complaining about the 3G switch off – please note that 4/5G should work just as well if the spectrum or radio frequency that is used is repurposed, that has no need for new infrastructure.
After for the merger itself I will say a 51% chance it goes though because of previous EU rulings but that’s is up in the air for obvious reasons. I am personally in favour of a merger as it seems three cannot complete effectively or Vodafone to a lesser extent.
It has been 6 month and 4G/5G not existence, where before we used to have full bar 3G and at least was able to send iMessage, now it’s just Edge. Pretty sure 6 month is enough time to repurpose the masts…
Its all good and well saying that, however in reality theyre not repurposing straight away (as in on the day of switch off, ready with new kit/ whatever) and areas are being left dead for months and counting and nearest 4G & 5G mast is miles away.
Except they didn’t do any of that, at least round here. Everything has gone downhill since the 3G switch-off. Previously you could do the basics, now it’s a struggle to do anything that needs data. And 5G? What is that?
I used to get faster speeds on 3G in 2009 on the O2 network when I got my first iPhone (a 3GS). That’s how bad it is now.
As someone who wants nothing to do with Vodafone, I hope things won’t change much for Three and its MNVOs if they merge with VF
The network will become Vodafone (its a backdoor route to buy Three, under the guise of a ‘merger’).
Business as usual, grab more market share, get rid of the competition. No more Three, no more reasonable prices. Vodafone shareholders will be happy.
Ugh… I hope not
Ah, result in time for Christmas! Brown envelopes with Christmas Bonus inside then.
I don’t like Vodafone I had problems never go back but I do love 3 mobile and had no problems so if it does happen I new contract with them from last year I won’t trust Vodafone and I won’t stay with 3 either so 3 stay the way you are don’t go with Vodafone lose me I been with 2004 so I be leaving
When I look at this merger, I don’t base my opinion on personal experiences as some people have, but rather consider the bigger picture: what’s good for the country, the marketplace, and how it impacts competition. Let’s examine the market: how many actual phone operators do we have today compared to 10 or even 15 years ago?
It’s well known that when mergers happen, competition often diminishes. Meanwhile, coverage in the UK as a whole, across all companies, is poor. This isn’t solely due to lack of infrastructure investment, which, by the way, they all claim they’re making in billions. It’s a combination of multiple factors, including regulation.
If we look at the current situation, there are four real UK networks:
EE
O2
Vodafone
Three
We know that O2 has merged with Virgin, so if Vodafone and Three merge, we’ll be down to three real network operators. This is not sufficient and would likely stifle the market and increase prices.
If I were in charge of telecommunications in the UK, I would propose the following:
Nationalize the infrastructure, i.e., create one infrastructure and one coverage system for the whole nation.
Change the law to allow taller masts to be built in the UK (helping with coverage).
Sell capacity at cost to MVNO (Mobile Virtual Network Operator) operators.
The benefits of this approach would be:
A) Better coverage nationwide
B) A higher likelihood of cheaper prices, with MVNOs focusing on different types of users and groups.
Now to my point: I am wholly against this merger as I don’t believe it will benefit consumers or the market as a whole.
As far as nationalising the infrastructure, if this is what you want there is no point to private retail providers, it would be easier to have a single provider by the government. It will also a big waste of public money that can be better spent elsewhere so it’s good you are not incharge of telecommunications.
To your point about the merger I disagree with your claim that competition will be harmed or atleast is as straightforward as you claim, a marketplace with two excellent networks and two smaller less efficient networks cannot compete properly and the market as a whole will be better served with a merger of smaller players, the effect on customers will be neutral in my opinion with prices increasing slightly as now.
This merger may or may not harm prices. Remember that when your SIM card contract is over – you can bargain with the outbound retentions team by putting in your 30 days of cancellation request. This can reduce your bill by up to 50 to 75%. That is how I managed to get my Virgin Media Gig1 Broadband for £18 per month instead of paying £41 per month (£41 is the price advertised on their website).
Increase in prices, including roaming fees and PAYG fee rates, will give more money to the networks which will allow them to purchase better equipment for 4G and 5G.
A few countries have three network operators, and they are doing completely fine.
There’s also Scancom, a third-party distribution provider, that can provide you cheaper SIMs than anywhere else.
No it won’t. Two broadband networks basically BT/Brokenreach and Vermin Media. Competition didn’t on price exist until Altnets come along, and that also made BT and Virgin do full FTTP.
It’s in Vodafone’s DNA to be the most expensive, always has been, and the competitive tariffs from Three will cease to exist. Three’s 5G network works quite well too.
I’m in two minds about this merger. I’m with Three and have been for many years. Their coverage across South Wales and into west Wales is great. They may not have the fastest speed.
Vodafone will wreck what they have built and make them more expensive.
But the coverage will be so much better.
For those saying they are more 2G-EDGE, I wonder if your older 4G phone doesn’t have VoLTE or if it does is it active? Not all 4G phone supported Voice over LTE until around 2017 onwards. They clearly stated that when 3G is removed 4G will be put in it’s place and maybe even use the same block of spectrum.
If anyone is unsure, go to GSMarena and do a search for your model and you’ll see everything it supports.
I’m using an iPhone 15 Plus. It’s definitely a compatible device – It’s Vodafone that’s the problem.
this merger is not in the public interest, less competition higher prices, no incentive to keep customers or treet them with respect
You are implying that they do these things well right now? They clearly don’t. Coverage has never been worse and all 4 networks are unfit for purpose, apart from very small pockets where they perform well.
Try complaining if you live in a poor service area – they will instantly issue you a PAC code. They do not care about improving anything.
Merger or no merger, I predict that not a thing is going to change.
my experience with vodafone has always been poor, I do not trust that they have the ability to product accurate bills; Three on the other hand have got their act together.
As for the network, the three brand will very likely disappeaar and so will I as a customer of vodafone.
Hopefully the merger will be blocked then they will both get back to building out a better network. Prices WILL increase with or without the merger, thats a fact of life
Vodafone broadcasts this message constantly from any possible outlet and iron.
We have to buy 3, it is the only option and everyone will win from this.
But not everyone.
As Three was hugely building their network up with one tiny unacceptable note, they used Huawei mostly as an active equipment. And that is it.
Once merge is allowed and Three is sold out. UK critical infrastructure will be under threat in this very unstable World and time. And they will launch another campaign. “You see, it is already in place, it work, how reliable it is, we can’t simply replace it”
Once Three replaces all their Huawei to some allowed, then I do agree, advantages will be unprecedented.