The UK's antitrust watchdog is gearing up for a more extensive examination of the proposed fusion between Vodafone Group's local mobile-phone arm and CK Hutchison’s Three UK, expressing

worries that the amalgamation might result in escalated consumer costs.

The companies are given a five-day window to present "meaningful solutions" to circumvent an in-depth inquiry, the Competition and Markets Authority announced on Friday.

Vodafone UK and Three UK characterized the impending in-depth scrutiny as a predictable progression in the procedure, affirming their anticipation of finalizing the merger within their initially outlined timeframe. In the previous year, the companies had projected the deal's closure by the conclusion of 2024.

The regulatory body is considering the potential ramifications of uniting two of the UK's four mobile networks, cautioning that such consolidation could translate into elevated prices and diminished service quality for customers.

Despite assertions from Vodafone and Three regarding the merger's beneficial impact on competition and investment, the CMA has deemed the evidence insufficient to validate these assertions.

Under the proposed merger, a single network provider would oversee the 27 million customers currently under the umbrella of Vodafone UK and Three UK, as noted by the regulatory authority. The companies have been given a brief window to propose solutions to avert a deeper "Phase 2" investigation.

In response to the CMA's move, Vodafone UK and Three UK emphasized the anticipated progression of the inquiry and reiterated their commitment to adhering to the original timeline for the merger. They argued that both entities operate at a sub-scale level, struggle to cover their capital costs, and face limitations in effectively competing against the dominant market players.

Vodafone has been strategically concentrating on its primary European markets, with the UK being one of them. Recently, the company announced the sale of its Italian division to Swisscom AG for 8 billion euros ($8.7 billion), indicative of its focused approach to refining its market presence and operations. Photo by Gravityaddict, Wikimedia commons.