Competition in the United Kingdom to continue the investigation into the merger between Vodafone and 3

Companies have five business days to propose changes due to concerns about the impact of the merger on users

Madrid, March 22 (European Press) –

The Competition and Markets Authority (CMA) on Friday expressed concern that the merger between Vodafone UK and Three UK could lead to higher prices for mobile customers and lower quality, which is why it will open an in-depth investigation into the agreement, unless the companies provide “significant” solutions in the five business days. Coming.

The Capital Markets Authority launched its preliminary investigation in the “first phase” at the end of last January to assess whether the deal could lead to “a significant reduction in competition” and therefore requires an in-depth investigation in the “second phase,” allowing an independent investigation to be conducted. A team of experts to further investigate the initial concerns identified.

The British regulator on Friday expressed concern that a merger between two of the country's four mobile network operators “could lead to higher prices for customers and impact investment in UK mobile networks,” adding that the merger could lead to customers facing a standoff. Mobile “higher prices”. and lower quality.”

The CMA is also concerned that the deal could make it harder for smaller 'virtual' mobile network operators, such as Sky Mobile, Lebara and Lyca Mobile, to negotiate good deals for their customers, by reducing the number of network operators able to use mobile phones. To host these “virtual networks”.

Julie Bone, head of takeover decisions, said: “While Vodafone and 3 have made a number of claims about how their deal will benefit competition and investment, the CMA has not yet seen sufficient evidence to support these claims.” In the first stage of this case before the Capital Markets Authority.

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He added: “Our initial assessment of this deal has identified concerns that it could result in higher prices for customers and reduced investment in UK mobile networks. This requires an in-depth investigation unless Vodafone and 3 can provide solutions.”

Vodafone UK and Three UK therefore have five business days to respond to the CMA's “meaningful solutions”; Otherwise, the agreement will be referred for a deeper investigation in the second phase.

Last December, the European Commission gave its approval to the agreement between Vodafone and CK Hutchison Group Telecom (CKHGT) to merge their telecommunications business units in the UK, which in the case of CKHGT is being carried out through Three UK, concluding that the process and It has a negative impact on the European Economic Area, as its impact will be “limited”.

As the two companies reported when announcing the agreement, Vodafone will own 51% of the combined business and CKHGT the remaining 49%, adding that around 11 billion pounds (about 12.4 billion euros) will be invested in the next decade to create one of the combined companies. “The most advanced independent 5G networks” and “fully aligned” with the country’s government goals.

The deal, which is expected to be completed by the end of 2024 subject to regulatory approvals, was executed without a cash payment, with the two companies contributing debt to complete the distribution of 51% to Vodafone and 49% to CKHGT.

Vodafone confirmed that the combined company will achieve profits amounting to about 5,000 million pounds sterling (about 5,840 million euros) by 2030, in addition to creating job opportunities and supporting the digital transformation of the United Kingdom.

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In addition, the operation is expected to generate synergies worth approximately £700 million (about €817 million) from costs and capital investments from the fifth year after the closing of the operation.

Regarding the direction of the new company, Vodafone UK's current CEO, Ahmed Essam, will become CEO of the new company, while Three UK's current CFO, Darren Purkis, will assume the same role. Position in new joint business.

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