UK regulator opposes Vodafone-Three merger, calls for remedies to prevent price hikes.

• Vodafone has stated that it does not agree with the CMA's conclusion that customers' prices will rise and is prepared to legally bind itself to a £11 billion investment promise.

The UK's competition authority has raised concerns about the merger between Vodafone and Three UK, which is owned by CK Hutchison.

The CMA stated that the deal would result in higher prices for millions of customers or reduced services for some users, and would negatively affect Mobile Virtual Network Operators (MVNOs) that use existing infrastructure.

The CMA has provisionally concluded that the merger would result in a significant reduction of competition in the UK's retail and wholesale mobile markets, according to a press release from the regulator.

The merger of Vodafone and CK Hutchison's U.K. businesses, announced last year, would result in Vodafone having a 51% controlling stake and CK Hutchison holding the minority interest.

An antitrust investigation into the deal was launched by the CMA in both January and April.

The merger of Vodafone and Three U.K. would decrease the number of major telecommunications network players from four to three, the regulator stated, indicating that this could make it more challenging for MVNOs to obtain competitive pricing, potentially hindering their ability to offer competitive rates to customers.

The CMA acknowledged that the merger deal could enhance mobile networks and accelerate the rollout of 5G services, as claimed by the two networks involved.

The CMA warned that the merged firm may not have the motivation to fulfill its investment plan after the merger, and that the claims made about the investment could be exaggerated.

The CMA has not blocked the deal.

Vodafone response

The merged entity will invest £11 billion ($14.46 billion) into U.K. telecommunications infrastructure, as stated by Vodafone.

Vodafone stated on Friday that it does not agree with the conclusion that the merger would result in higher prices for consumers. The company emphasized that the merger would not alter its pricing strategy, and there would be increased competition among MVNOs.

Essam stated that every consumer in the U.K. today acknowledges that there are more than a hundred players in the market, offering a wide range of offers. With this merger, we are introducing a third scaled quality network that will be able to compete and deliver better outcomes for customers.

What's next?

The CMA will now consult on its competition concerns and potential solutions, including legally binding investment commitments and measures to protect retail and wholesale customers.

Essam stated that we collaborate closely with the CMA, and their provisional findings mean that we will work with them over the next three months to address any concerns they may have.

The CMA will issue its final report by Dec. 7 this year.