CMA Seeks Additional Three/Vodafone Remedies

Credit negative to the extent that Vodafone had appeared confident in recent months that no material remedies would be required for the UK merger given it’s a combination of the #3 and #4 mobile operators though the CMA has prior form in resisting consolidation (i.e. Telefonica/Three) and additional remedies were likely baked into market assumptions. A spectrum agreement with VMO2 was already offered which had allegedly addressed the latter’s voiced issues though clearly the CMA is still unconvinced.

• CMA has provisionally found the Vodafone-Three merger may result in 5-20% price hikes for 27mn customers and reduced competition for MVNOs.
• Parties claim the merger would accelerate GBP 11bn in 5G investment, though CMA doubts full delivery of these benefits.
• Potential remedies include prohibition, partial divestiture of assets/spectrum, or wholesale access terms for MVNOs. Structural remedies (prohibition/divestiture) are preferred as behavioural commitments will require monitoring.
• CMA will consider submissions until 27 Sept.
• https://assets.publishing.service.gov.uk/media/66e3ca8a0d913026165c3df4/Summary_of_provisional_findings.pdf
• https://assets.publishing.service.gov.uk/media/66e3ca4cbfc2fdc9641316e0/Notice_of_possible_remedies.pdf.