The competition authority has published the responses it solicited from third parties, including a 40-pager from BT arguing against it
The UK’s Competition and Markets Authority (CMA) has been urged by a number of parties with vested interests to block the proposed merger of Three UK and Vodafone. The two announced they were in talks to merge in 2022 then announced they had agreed terms for the deal in June 2023.
A major motivation is to achieve the greater scale they say they need to invest sufficiently in infrastructure, an argument that they also hope will find favour with regulators.
At the time of that announcement, they pledged that the merged entity would reach 99% of the UK’s population with its 5G standalone network. Also, that the combined business will invest £11 billion in the UK over 10 years which is expected to give customers up to a six-fold increase in average data speeds by 2034.
Third parties have their say
The proposed merger is in the second, deeper phase of the investigation by the CMA which includes wider consultation with the industry. It has just published the submissions it has received. The regulator is concerned that allowing the two to merge will ultimately raise prices for consumers and businesses, and reduce competition and choice.
The former state-owned incumbent BT is arguing in its submission that the merged entity would have a “disproportionate share of capacity and spectrum, unprecedented in UK and Western European mobile markets, which will substantially lessen competition and deter investment.”
Further, that it will inhibit BT’s ability to compete.
Emphasis in the wrong place?
Many critics of competition policy for telecoms in the UK and Europe, including Strand Consult, would argue that the focus on choice and prices to end users is wrongheaded. Rather the policy makers should also take into account operators being able to run sufficiently profitable businesses to invest in infrastructure for national and regional economies to compete better.
And adjacent to that, some national treasuries should not extract huge amounts of money from mobile operators off for spectrum licences.
The CMA is schedule to publish an initial ruling by 12 October.