The UK's Competition and Markets Authority (CMA) has approved the $19 billion (£15 billion) merger between Vodafone and Three, subject to specific conditions aimed at ensuring investment

in the country's 5G network and safeguarding competition.

The CMA’s approval requires both companies to sign binding commitments to invest billions in rolling out a nationwide 5G network over the next eight years. Additionally, the combined entity must cap certain mobile tariffs and offer preset contractual terms to mobile virtual network operators (MVNOs), which rely on leasing network access from other providers.

The merger will combine Vodafone and Three’s UK operations, with Vodafone retaining a 51% controlling stake while CK Hutchison, Three's parent company, holds the remaining minority share. The deal is expected to be finalized in the first half of 2025.

The CMA launched its antitrust investigation into the merger earlier this year, raising concerns about potential price increases and reduced service quality resulting from the reduction of major telecom players from four to three. However, after months of scrutiny, the regulator concluded that the merger could boost competition if the proposed remedies are implemented.

Stuart McIntosh, chair of the CMA’s independent inquiry group, stated, “Having carefully considered the evidence and extensive feedback, we believe the merger is likely to enhance competition in the UK mobile sector, provided Vodafone and Three implement our proposed measures.”

Vodafone and Three have pledged to invest £11 billion into the UK’s telecommunications infrastructure as part of the merger. To protect consumers, the CMA has imposed a three-year cap on certain mobile tariffs and data plans, along with fixed pricing and contractual terms for MVNOs. The CMA and communications regulator Ofcom will oversee these conditions.

Kester Mann, director of consumer and connectivity at CCS Insight, called the deal “one of the most significant moments in UK mobile history,” creating a new market leader with 29 million customers. Mann noted that the agreed remedies were less stringent than anticipated, marking a favorable outcome for Vodafone and Three.

Vodafone CEO Margherita Della Valle welcomed the decision, saying it “unlocks the investment needed to build the network infrastructure the country deserves.”

While the merger promises significant long-term benefits, Paolo Pescatore, founder of PP Foresight, cautioned that it will take years for its full impact to materialize. “There’s a lot of tough decisions to come,” Pescatore said.

The merger represents a transformative moment for the UK’s telecom sector, with potential to enhance digital infrastructure while addressing competitive concerns through regulatory oversight. Photo by vodafone - Commercial Street by Betty Longbottom, Wikimedia commons.