The Competition and Markets Authority (CMA) opened its initial investigation into a proposal to merge Vodafone Group and CK Hutchison’s UK telecoms businesses, as the pair continued to promote the anticipated benefits of the floated move.
In a statement the CMA revealed it had received the required information on the proposed deal, which was announced by the operators in June last year, and was commencing an initial look to assess the expected impact on competition for businesses and consumers.
The authority has already gathered opinions on the intended tie-up from third parties having requested early comments in October. It is now accepting more views on the proposal with this window closing on 9 February.
It is working to a deadline of 22 March for the phase one investigation. Should it decide the deal could lead to a “substantial lessening of competition”, a second more in-depth probe will be opened. A phase two investigation would then likely last between 24 and 32 weeks.
Charm offensive
As the CMA announced the opening of the investigation executives from both operators released statements once again extolling the virtues of the agreement for the UK’s 5G rollout.
3 UK CEO Robert Finnegan said combining the pair’s networks would: “unlock £11 billion of investment that will help the UK close the 5G gap with leading European countries and realise its ambitions to be a front-runner in digital connectivity”.
He claimed the move would benefit its current customers and pave the way for 95 per cent of the country’s population alongside “every school and hospital” to be covered by standalone 5G by the end of the decade.
“We are confident that this transaction will deliver significant benefits to our customers, the country and competition, and we look forward to working closely with the CMA as they review our notification,” the executive added.
Vodafone UK CEO Ahmed Essam said it looked forward to “continuing the constructive conversations [with the CMA] now that the formal process has begun.”
“We strongly believe that the proposed merger of Vodafone and Three will significantly enhance competition by creating a combined business with more resources to invest in infrastructure to better compete with the two larger converged players,” he added.
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