Three and Vodafone merger will type UK’s largest cellular community: What does it imply for you?
- Deal could mean prices falling and better 5G – but some fear bills could increase
The UK’s biggest mobile operator will form next year, as the competition regulator has cleared the £15billion merger of Three UK and Vodafone.
The Competition and Markets Authority said the Three and Vodafone deal can go ahead in 2025 if the two firms spend billions investing in 5G infrastructure.
The merger would also see the price of some mobile deals capped for three years – a distinct bonus in a mobile landscape that has seen huge year-on-year bill increases.
It would see 27 million customers brought together under one roof, and was first mooted in 2023.
But experts are divided on whether the deal would see prices rise or fall, and what it means for mobile phone competition in the UK.
This is everything you need to know about how the merger would affect you.
Big deal: A merger of Vodafone and Three creates one of the biggest mobile firms in the world
Will Three and Vodafone continue to exist?
Yes, as separate brands. If you are a customer of either firm, there are no announced changes to how your mobile contract will work.
After three years, Vodafone will be allowed to buy out the rest of Three, which is currently owned by CK Hutchison Group Telecom Holdings.
Is the deal certain?
Not yet, as the CMA has certain requirements it wants the firms to meet first.
These include Three and Vodafone investing billions in 5G infrastructure over eight years and capping the price of certain deals for three years. If the firms don’t, then the deal is off.
Stuart McIntosh, chair of the inquiry group leading the CMA investigation, said: ‘It’s crucial this merger doesn’t harm competition, which is why we’ve spent time considering how it could impact the telecoms market.
‘Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.’
Which deals will have prices capped?
This has not yet been announced, and details will come in a further report from the CMA.
The CMA has not outlined which specific price plans would be protected. It is understood this detail will be in a full report into the merger, which has not been published yet.
When will the deal complete?
In the first half of 2025.
What are the benefits of the merger?
The CMA thinks more widespread 5G services could be a perk of the Vodafone/Three merger.
This is because the combined scale of the merger could ‘improve the quality of mobile services and bring forward next generation 5G networks and services’, the CMA said.
But some experts think the merger could mean higher prices.
The CMA initially thought the merger could mean larger bills for customers, before changing its mind.
Rocio Concha, Which? director of policy and advocacy, said: ‘The two companies are currently close competitors so the merger is likely to reduce competitive pressure in the market which could lead to higher prices and lower quality for consumers, at least in the short term.’
However, the prospect of higher prices was shot down by Vodafone’s chief executive, Margherita Della Valle.
She told the BBC Today programme that the deal would mean ‘no extra costs from public funding and no extra cost for our customers’.
How many mobile operators are left?
Once the deal goes through there will be just four mobile network operators in the UK – Vodafone UK, Three UK, BTEE and Virgin Media O2.
A mobile operator owns and operates a network that allows mobile phones to communicate.
Many other firms rent part of this network to provide their own services, such as Giffgaff, Tesco Mobile, Smarty and more. These firms are called ‘mobile virtual network operators’ (MVNOs) and there are 18 of them, seven of which use the services of Vodafone and Three.
What happens if my mobile firm runs on the Vodafone/Three network?
Seven mobile phone firms are MVNOs using either Vodafone or Three networks.
These are Asda Mobile, iD Mobile, Lebara, Smarty, Superdrug Mobile, Talkmobile and Voxi.
Customers of these firms should not see price rises for three years – at least, not price rises linked to the merger.
This is because the CMA has said these firms will get prices and contract terms locked for three years as part of the merger deal.
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