The UK Competition and Markets Authority (CMA) has determined that the agreement between Vodafone and CK Hutchison Group Telecom (CKHGT) for fuse its telecommunications business units in the United Kingdom, which in the case of CKHGT are carried out through Three UK“could be carried out if appropriate measures are implemented,” including a “multi-million dollar commitment” to improve the merged company’s network and short-term consumer protection measures.
Last April, the British regulator decided to send the agreement for an “in-depth investigation” considering that the merger, valued at around £15 billion (€17,859 million), could result in a substantial decrease in competition in the United Kingdom.
In a provisional announcement, prior to the final decision which will be known no later than the next December 7the CMA believes that a multi-billion pound commitment to improve the merged company’s network across the UK, including the rollout of 5G, combined with short-term protections for customers “could resolve the competition issues identified » and allow the merger to go ahead.
“It has the potential to be procompetitive»
«We believe that this agreement has the potential to be procompetitive for the UK mobile sector if our concerns are addressed,” said Stuart McIntosh, chair of the research group leading the CMA investigation.
In this sense, after consultations with interested parties in this regard, the regulator published this Tuesday a working document on applicable remedies in order to gather opinions on the effectiveness of the proposed measures.
According to the CMA’s provisional opinion, a legally binding commitment to carry out the network integration and investment program proposed by Vodafone and Three would significantly improve the quality of the mobile network of the merged company, “driving competition among mobile network operators in the long term” and benefiting millions of people who depend on mobile services.
Likewise, the CMA also determines the need to implement short protections term to ensure that retail consumers and mobile virtual network operators can continue to get good deals during the initial years of the network integration and investment rollout process.
To this end, it proposes that companies submit their joint network plan, which sets out the network upgrades and improvements they will make through significant levels of investment over the next 8 years across the UK. This would be a legal obligation overseen by both Ofcom, the country’s telecommunications regulator, and the CMA.
Additionally, operators must commit to maintaining certain existing mobile tariffs and data plans for at least 3 years, thereby protecting millions of current and future Vodafone/Three customers from short-term price increases in the early years of the network plan. .
Following the CMA’s announcement, Vodafone and Three have “welcomed” the regulator’s recognition that the significant improvements in network quality provided by their Joint Network Plan “will drive competition between mobile network operators in the long term.” term and will benefit millions of people who depend on mobile services.
An EU endorsed merger
Last December, the European Commission gave its approval to the agreement between Vodafone and CK Hutchison Group Telecom (CKHGT) to merge their telecommunications business units in the United Kingdom, concluding that the operation would not have a negative impact on the space. European economy, since its effect would be “limited”.
As reported by the companies when announcing the transaction, Vodafone will own 51% of the merged business and CKHGT the remaining 49%, adding that around 11 billion pounds (more than 13 billion euros) will be invested in the next decade to create one of the “most advanced independent 5G networks” and in “full compatibility” with the objectives of the country’s Government.
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