Vodafone’s high-profile merger with rival telecoms giant Three has been delayed once again, following the UK’s competition regulator’s decision to extend the deadline for its investigation into the deal.
The Competition and Markets Authority (CMA) has announced that the probe, which was originally scheduled to conclude by early October, will now be delayed by eight weeks, with a revised deadline of 7 December. In a statement, the CMA said: “The Inquiry Group now considers that it will not be possible to complete the investigation and to publish its final report within the revised reference period. The Inquiry Group aims to complete the inquiry as soon as possible.”
This delay comes as the CMA outlines four key reasons for requesting the extension. Among these is the significant spectrum-sharing agreement between Vodafone and Virgin Media O2, unveiled just last month, which the CMA stated would require further examination. The regulator explained that it needs to assess the implications of this new agreement, including gathering and analysing additional evidence from third parties involved.
Another reason for the delay was described as a “failure” by Three’s parent company, CK Hutchison, to comply with earlier requests for documents and information. The CMA noted that CK Hutchison has since complied with the request, but the delay in providing this information has pushed back the investigation timeline.
Vodafone responded to the news with a statement, acknowledging the regulator’s decision to extend its investigation. “It is not unusual for the CMA to exercise its right to extend its reference period in cases such as this,” the company said. “We appreciate the additional time it is taking to assess the extensive evidence submitted, which sets out how this transaction will significantly benefit over 50 million mobile customers, enhance competition, and help transform the UK’s digital infrastructure. We will continue to work closely with the Inquiry Group as it finalises its report.”
The £15 billion merger, initially unveiled in June 2023, is set to create a telecoms powerhouse, merging Vodafone’s UK operations with Three to form the largest mobile network operator in the country. The combined company would serve around 27 million customers, surpassing both BT Group’s EE and Virgin Media O2, positioning Vodafone-Three as a dominant force in the UK market.
Under the terms of the deal, Vodafone would retain a 51% majority stake, while Three’s parent company CK Hutchison would hold 49%. Despite clearing the first regulatory hurdle in May 2024 after the UK government decided not to intervene following a national security review, the deal still faces potential roadblocks from competition regulators. This raises concerns that the merger could ultimately be blocked, similar to a previous bid by Three to merge with O2 in 2016, which was rejected by the European Commission over competition concerns.
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Vodafone, however, remains confident that the merger will ultimately be approved, citing its plans to invest £11 billion into the UK’s telecoms infrastructure. The company argues that the merger would significantly accelerate the rollout of 5G technology in the UK, delivering potential economic benefits of up to £5 billion annually by 2030. The deal is also expected to help enhance competition in the sector, providing more options for customers and driving further innovation.
Despite the delay, industry experts remain divided on whether the merger will ultimately pass regulatory scrutiny. Some analysts believe that the merger will help Vodafone and Three better compete with global telecom giants like BT and Virgin Media O2, while others warn that it could reduce competition and lead to higher prices for consumers.
If approved, the Vodafone-Three merger would mark the culmination of several years of consolidation within the UK telecoms sector. The deal would create a new powerhouse that could have a significant impact on the future of mobile networks in the country, from 5G rollouts to the continued development of high-speed internet infrastructure.
However, for now, the future of the merger remains uncertain, as the CMA continues its investigation and industry observers await the regulator’s final decision in December.
