A pedestrian walks past a Vodafone store in central London on May 16, 2023. British mobile giant Vodafone is to axe 11,000 jobs over three years in the latest cull to hit the tech sector, as new boss Margherita Della Valle slammed recent performance. Adrian Dennis | AFP | Getty Images
The U.K. competition regulator on Thursday referred the proposed merger between Vodafone and CK Hutchison’s Three mobile network to an in-depth investigation. The Competition and Markets Authority said, with the information that it currently has, the deal may “be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”
In late March, the CMA gave Vodafone and CK Hutchison five working days to come up with “meaningful solutions” to the regulator’s concerns or face an in-depth investigation. The CMA has given itself a deadline of Sept. 18 to complete the in-depth probe, also known as a phase 2 investigation. Vodafone and Three were not immediately available for comment when contacted by CNBC.
The CMA has previously said the deal could lead to customers facing higher prices and reduced quality, a lessening of competition in the U.K. market. Regulators have argued the transaction could also result in mobile virtual network operators, which rely on Vodafone and Three’s infrastructure, not being able to negotiate good deals for their own users.
The regulator’s process hinges on a decision on whether the deal will lead to a “substantial lessening of competition” (SLC) in the market. The CMA can clear the transaction in the absence of SLC or request remedies from the companies to address its concerns.
Announced last year, Vodafone and CK Hutchison’s transaction would merge the two brands’ U.K. businesses, giving Vodafone a 51% controlling stake and leaving CK Hutchison with the minority interest. The combination of Vodafone’s U.K. business and Three UK will reduce the number of mobile operators in the country to just three, following major consolidation in the telecommunications sector in the past few years. The CMA opened an antitrust probe into the merger in January.
Vodafone, a British mobile giant, is set to lay off 11,000 jobs over the next three years due to poor performance under new CEO Margherita Della Valle. The proposed merger between Vodafone and CK Hutchison’s Three mobile network has been referred to an in-depth investigation by the U.K. competition regulator. The Competition and Markets Authority has expressed concerns that the merger may result in a substantial lessening of competition in the U.K. mobile market, potentially leading to higher prices and reduced quality for customers. The regulator has set a deadline of September 18 to complete the investigation and make a decision on whether the merger will be approved. If approved, the merger would reduce the number of mobile operators in the U.K. to just three, following recent consolidation in the telecommunications sector. The CMA is currently assessing whether the deal will lead to a substantial lessening of competition and may request remedies from the companies involved to address any concerns.
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