Britain’s competition regulator further investigated Vodafone’s planned combination of British mobile phone operations with those of Three UK, owned by Hong Kong-based CK Hutchison, expressing worries about increased prices on Thursday.
The Competition and Markets Authority (CMA), which started a formal inquiry into the merger in January, stated in a release that it will commence a thorough investigation after both companies refused to offer assurances to alleviate its concerns.
The watchdog, citing an AFP report, had cautioned last month that the deal could significantly affect competition and might result in higher prices and reduced quality for consumers. It had given the groups until April 2 to reply.
“The CMA has referred the expected partnership… for thorough examination,” it stated in a release on Thursday.
“Based on the information presently available, it is possible that this merger might lead to a substantial reduction in competition in one or more markets in the United Kingdom.”
Vodafone responded that the move was “an anticipated next phase in the process” and expressed confidence in completing the transaction, while emphasizing that there will be no changes in pricing.
“Vodafone UK and Three UK are still confident that the merger will enhance competition in the mobile sector and provide customers and businesses with a significant improvement in network quality, speed, and coverage,” Vodafone stated in an email to AFP.
“Both companies have already indicated that there will be no alteration in each operator’s pricing approach as a result of the merger.”
The proposed alliance, revealed in June last year, aims to establish Britain’s largest mobile operator with 27 million clients and expedite the introduction of faster 5G connectivity.
Under the planned deal, Vodafone will own 51 percent of the combined entity, with CK Hutchison holding the remainder.
The two entities have set a target value of £16.5 billion ($21 billion) for the new company.
If approved, the merger will propel the combined operations ahead of the United Kingdom’s two leading mobile operators BT EE and Virgin Media O2 in terms of customer numbers.
The expansion of 5G across the UK has been hindered by the country’s ban on Chinese giant Huawei, a major supplier of equipment for mobile networks.
AFP
