{"id":35774,"date":"2023-09-20T12:04:06","date_gmt":"2023-09-20T11:04:06","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=35774"},"modified":"2023-09-20T12:04:06","modified_gmt":"2023-09-20T11:04:06","slug":"security-concerns-dominate-uk-parliament-debate-on-vodafone-and-three-merger","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/09\/security-concerns-dominate-uk-parliament-debate-on-vodafone-and-three-merger.html","title":{"rendered":"Security Concerns Dominate UK Parliament Debate on Vodafone and Three Merger"},"content":{"rendered":"

A meeting in the House of Commons (Parliament) was held yesterday that saw MPs from various different parties debate the proposed merger of Three UK<\/a> and Vodafone<\/a> (here<\/a>), which highlighted how the dominant concerns for MPs centre around issues of national security, job losses and the risk of higher prices for consumers.<\/p>\n

The merger, which would see Vodafone<\/a> hold a 51% slice of the business and CK Hutchison (Three UK<\/a>) retain 49%, has thus far been promoted by the operators as something that would be “great for customers, great for the country and great for competition<\/em>,” while also resulting in a major \u00a311bn<\/strong> investment to upgrade the UK\u2019s 5G<\/a> mobile infrastructure and network coverage.<\/p>\n

NOTE:<\/strong> The combined business aspires to reach more than 99% of the UK population with their 5G<\/a> Standalone (SA) network by 2034 and push fixed wireless access (mobile home broadband) to 82% of households by 2030, among other things.<\/div>\n

However, regulators and politicians previously tended to discourage mergers that reduced the number of primary mobile operators to three, largely due to concerns over the impact on competition and consumer prices. But that changed in 2020 after a ruling by the European Court of Justice<\/strong> (here<\/a>) found that having only 3 operators still made for a competitive market.<\/p>\n

On top of that, investing to build national 5G<\/a> and future 6G networks becomes a lot easier – delivering key benefits in areas of network performance and coverage. But such a large merger may still need to make concessions in order to fend off against regulatory concerns.<\/p>\n

Meanwhile, nearly all the MPs taking part in yesterday’s debate clearly had some big concerns, typically around the core issues of national security, job losses and pricing. But only a few remarks were made toward the positive improvements in network coverage that may result.<\/p>\n

Navendu Mishra (Labour) said:<\/strong><\/p>\n

“In July, it was announced that Vodafone<\/a> and Three UK<\/a> had agreed to combine their businesses, in an effort, they claim, to create one of Europe\u2019s leading 5G networks. Although I welcome the aspiration, such a deal will have terrible consequences, with higher prices for consumers, job losses alongside inflated corporate profits, and a threat to the UK\u2019s national security.<\/p>\n

When Vodafone and Three merged with TPG in Australia in 2020, they claimed that it would accelerate the benefits of substantial network investments made by both companies, when in reality investment levels across the sector are down by 45%.<\/p>\n

…<\/p>\n

Evidence suggests that there is extensive collaboration between the CK Group, the Li family that controls it and the Chinese state. It is well documented that the Li family has strongly backed pro-Beijing hardliner John Lee as the Chief Executive of Hong Kong, and supported a draconian new security law that would suppress dissent. On top of this, top CK Group executives sit on Chinese Government committees and have access to the inner circle of the Chinese elite. Does the Minister feel comfortable with a hostile foreign actor potentially having access to millions of UK citizens\u2019 data?”<\/p><\/blockquote>\n

Sir Iain Duncan Smith (Conservative) said:<\/strong><\/p>\n

“On the security issue\u2014as the hon. Gentleman knows, I have been sanctioned by the Chinese Government, like others\u2014I am concerned that there should be full and due diligence on such a merger, particularly given the Cheung Kong Group and the Li family being so knowingly involved with Chinese Government committees, their contacts in the Chinese Government and having to pass data over under the national security law.”<\/p><\/blockquote>\n

Jim Shannon (DUP) said:<\/strong><\/p>\n

“One big selling point is that under the proposal, the merged company is expected to deliver 5G coverage to nearly 99% of the UK population, which is huge and important.<\/p>\n

Constituents contact me regularly about rural network coverage\u2014broadband signals or on the phone network. My constituency of Strangford is rural. I live in the country, so I am fully aware of the issues that some families still have with 5G connection. It can go from working in certain areas of the house to not working at all\u2014people tell me about it every week in my constituency. That leads to consumers paying extortionate amounts for wi-fi and not getting the service that they deserve.<\/p>\n

…<\/p>\n

The comment has been made that the merger will make mobile bills less affordable. That cannot be ignored. We have already had a couple of years in which price increases have been quite significant, and have hit us all. If the merger closes the market to a number of companies, prices may go up.<\/p>\n

For all our constituents, whether the merger will impact them or not, the issues, including price hikes, security and convenience, must be spoken about.”<\/p><\/blockquote>\n

Carol Monaghan (SNP) said:<\/strong><\/p>\n

“Under the Chinese Government\u2019s state security laws, it would be possible for the personal data of all users of the new merged company to end up in the hands of the Chinese Government. That is bad enough, but Vodafone holds UK Government contracts for the NHS 111 helpline, the Ministry of Justice and the Ministry of Defence.<\/p>\n

…<\/p>\n

Security is one thing, but there are other concerns, as a number of Members have pointed out. What would the merger, and any further monopoly of the telecoms market, mean for consumer costs, consumer choice and job security in the UK? The merger would result in nearly half of all UK consumers falling into the company\u2019s market share. As the EU has previously warned when blocking similar mergers, that could harm consumers and give free range for price hikes.”<\/p><\/blockquote>\n

Sir Chris Bryant (Labour) said:<\/strong><\/p>\n

“As others have said, it will always be a matter of concern when two operators merge, taking the number from four to three, and especially so when that creates an operator with 27 million customers; it would be the largest in the field. That intrinsically implies that there will be less competition in the market, and that consumers might face higher charges.”<\/p><\/blockquote>\n

The Government’s Minister for Data and Digital Infrastructure, Sir John Whittingdale, replied that he was somewhat limited in his ability to respond to many of the biggest concerns in detail. This is partly because competition policy must be determined by an independent regulator, meaning the Competition and Markets Authority (CMA).<\/p>\n

The CMA may then also trigger a fairly new process under the National Security and Investment Act (NSIA), which would look at the aforementioned security concerns. Matters of national security are typically confidential discussions.<\/p>\n

Sir John Whittingdale said:<\/strong><\/p>\n

“[This] gives me an opportunity to say something about the importance of mobile connectivity and 5G technology, which has enormous potential to transform public services and make our workplaces more effective, connecting healthcare workers, vehicles, traffic flows and so forth.<\/p>\n

We reckon that widespread adoption of 5G could bring \u00a3159 billion in productivity benefits across sectors by 2035. The Prime Minister has set out the UK\u2019s ambition to be the leading science and technology superpower by 2030. If we are to achieve that aim, connectivity will play a critical role. To reach that point, we will rely heavily on investment by the mobile companies, and we are in regular dialogue with them.<\/p>\n

…<\/p>\n

In general, the Government welcome investments into the UK that will support growth and jobs, meet our legal and regulatory requirements, and not compromise our national security, but as everybody who has participated in the debate has stressed, the security of critical national infrastructure is of prime importance.<\/p>\n

…<\/p>\n

The hon. Member for Stockport and others expressed concern about the potential impact on jobs. That is essentially a commercial matter for the company. Yes, Vodafone has announced the loss of 11,000 jobs globally over the next three years, and obviously that is a matter of regret. Those are difficult decisions, but they are commercial decisions for the company. There is no reason to believe that the merger will add to that number. Again, that will be taken into account in the examination of the case for the merger.<\/p>\n

The hon. Gentleman referred to analysis by Unite the union on what happened when a similar merger took place in Australia. However, every market is different. We cannot extrapolate from what happened in Australia, where there were different timings, a different state of the market and different network providers, to reach conclusions about the impact here.<\/p>\n

On price rises, we recognise that this is a difficult time for many people, who face significant challenges with the cost of living. I would like to take this opportunity to pay tribute to the mobile operators, including Three and Vodafone; they have done a lot to try to support consumers through these difficult times, not just during the rise in the cost of living, but throughout the pandemic, in particular by bringing forward social tariffs for those on low incomes, donating millions of gigabits of data to the National Databank and providing devices through the National Device Bank.”<\/p><\/blockquote>\n

The full debate can be read here<\/strong><\/a>, although as the government correctly points out, the decisions about all this will ultimately be up to the regulators.<\/p>\n","protected":false},"excerpt":{"rendered":"

A meeting in the House of Commons (Parliament) was held yesterday that saw MPs from various different parties debate the proposed merger of Three UK and Vodafone (here), which highlighted how the dominant concerns for MPs centre around issues of national security, job losses and the risk of higher prices for consumers.<\/p>\n","protected":false},"author":1,"featured_media":34985,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[472,38,479,63,96],"class_list":["post-35774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-business","tag-politics","tag-security","tag-three-uk","tag-vodafone"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nSecurity Concerns Dominate UK Parliament Debate on Vodafone and Three Merger - ISPreview UK<\/title>\n<meta name=\"description\" content=\"A meeting in the House of Commons (Parliament) was held yesterday that saw MPs from various different parties debate the proposed merger of Three UK and\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/09\/security-concerns-dominate-uk-parliament-debate-on-vodafone-and-three-merger.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Security Concerns Dominate UK Parliament Debate on Vodafone and Three Merger - 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