Vodafone and Three's UK merger hits regulatory roadblock
- Reference: 1712230209
- News link: https://www.theregister.co.uk/2024/04/04/vodafone_three_cma/
- Source link:
Toward the [1]end of last month , the Competition and Markets Authority (CMA) said that the alliance could result in increased prices for customers and lower investment in UK mobile networks, and as such intended to refer the transaction to a Phase 2 process.
Unite the union claims Vodafone and Three merger is about 'corporate greed' [2]READ MORE
The watchdog [3]confirmed today in a statement that it will run an "in-depth investigation" of the anticipated joint venture. It further warned that the tie-up could have negative consequences.
The merger "may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom for goods or services, including for the supply of: retail mobile telecommunications services to end consumers in the UK, including both consumers and business customers; and wholesale mobile services in the UK."
The statutory deadline for the Phase 2 probe is September 18 with a four-person inquiry group presiding, including CMA chair Stuart McIntosh, Stuart Rose, Ashley Gunn, and Crispin Wright.
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As readers might expect, both Vodafone and Three are wholeheartedly behind their merger. Vodafone reiterated to us last month that the enlarged organization will invest £11 billion ($13.,92 billion) into 5G technology, and give them the scale to compete with the UK's other major telcos, BT and Virgin Media O2.
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Robert Finnegan, CEO at Three UK, told us: "The current market structure is holding the UK back, which is not good for customers or competition. By creating a third player with the necessary scale to invest, the combination of our two companies will deliver one of Europe's most advanced networks and move the UK into the digital fast lane, benefiting customers from Day One."
[7]Vodafone, Three hustle to tie knot before regulators crash wedding
[8]Brits blissfully unbothered by snail-paced mobile network speeds
[9]UK merger of Vodafone and Three in competition watchdog's crosshairs
[10]BT to spell out contract price hikes in pounds and pence
Unions aren't nearly so keen on the pair consummating the agreement, with Unite's executive head casting its objections as "taking a stand for workers and consumers, against corporate greed and wheeling dealing."
Under the terms of the agreement, Vodafone would own a 51 percent stake in the joint venture and Three owner CK Hutchison the remainder.
Paulo Pescatore, founder of analyst PP Foresight, told us the Phase 2 process was "widely expected. In fact, any other outcome would have been a surprise. There are some concerns which need to be addressed."
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"Therefore, expect both parties to agree to concessions on spectrum and the merged entity will have to provide solutions on areas like network sharing, rather than create another problem. Both parties need to demonstrate that this is genuinely in the interest of UK plc, the economy, and consumers for it to have a chance of getting over the line.
"A marriage of convenience makes sense. Scale is key to help lower costs and improve margins. It could take years before we see the real fruits of this deal come to fruition if it goes ahead. The question is, can the UK wait that long?
"However, convergence still remains the Achilles' heel if this does get over the line. It would create a mobile champion that could increase competition in the wholesale segment of the market and become a partner of choice for MVNOs."
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Both Vodafone and Three would do well to take the CMA's investigation seriously, as they are likely to do. Meta's buy of Giphy fell afoul of the CMA, the probe into Microsoft's purchase of Activision Blizzard ran anything but smoothly, and other deals held up by the regulator – and those in other nations – include those of Nvidia and Arm, and Adobe and Figma. ®
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[1] https://www.theregister.com/2024/03/22/vodafone_threeuk_merger_headed_for_deeper_probe/
[2] https://www.theregister.com/2023/12/14/unite_the_union_claims_vodafone/
[3] https://www.gov.uk/cma-cases/vodafone-slash-ck-hutchison-jv-merger-inquiry?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=224d1903-a7dc-4f6f-bc7b-70368f5cf4c0&utm_content=immediately
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Zg7Omx@phGuNz-et-5aMbwAAAMQ&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zg7Omx@phGuNz-et-5aMbwAAAMQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zg7Omx@phGuNz-et-5aMbwAAAMQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2024/03/22/vodafone_threeuk_merger_headed_for_deeper_probe/
[8] https://www.theregister.com/2024/03/20/brit_mobile_habits/
[9] https://www.theregister.com/2024/01/26/vodafone_and_three_merger_cma/
[10] https://www.theregister.com/2024/01/17/bt_price_hike_change/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Zg7Omx@phGuNz-et-5aMbwAAAMQ&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Zg7Omx@phGuNz-et-5aMbwAAAMQ&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://whitepapers.theregister.com/
I've recently switched from Three to Vodafone:
1) Neither provide a useable service where I live (rural village with 200+ homes, with no working service from any of the providers).
2) Three service in the local towns is useless - you may get a signal, but often virtually no data over it.
3) Three service when travelling (North East) is virtually useless - lots of places with no signal at all, and others similar to 2.
4) Vodafone at least seems to provide a working services when I'm away from home.
5) Vodafone WiFi calling is much more robust - that from Three often dropped for hours at a time.
Three's billing is also "amusing" - since I left I have received monthly invoices (two copies by email) and SMS notifications for a sum of £0.00. These reminded me to cancel the DD, so I also then got a notification (2 x email, 2 x SMS) to say they will charge £5 a month for not being on DD (looking forward to the demand for £5 for not being able to collect £0).
"Unions aren't nearly so keen on the pair consummating the agreement"
Presumably the unions understand that the employees as the honeymooning couple are going to get a good seeing to .
I assume both BT and Virgin in the UK are vertically integrated telcos and compete at the retail level against their wholesale customers. In hindsight mandating the of divorce these two (or more?) layers might have resulted a better outcome for all customers and the nation.
NZ I think split their monopoly telco (Telecom NZ?) in two - the wholesale side I think is Spark with a number of retailers. NZ is said to have a much better and more uniform broadband service than Australia (not difficult that.)
Like the UK, Australia has the old monopoly telco Telstra , the original US Cable&Wireless competitor Optus (later sold to Singtel) and Vodafone plus a host of resellers and mobile virtual network providers.
Wholesale wired services are provided by a (currently) state owned national broadband network (NBN) and this whole shemozzle pleases no one and seriously pisses off most customers.
Obviously important news
I was surprised walking through town at lunchtime when my 10 years old asked why the Vodafone shop had not been renamed Vodafone Three yet. I 'm not sure how he knew about the merger, as his entire world seems to consist of playing Roblox or Minecraft, and I doubt it was from his 8 year old brother who spends 100% of this time watching game playing videos on YouTube.
P.S. Just tore him away from the computer to ask, and he says he heard in it on breakfast news, I said we didn't watch that today, but he said "oh, it was weeks ago" - mind like a steel trap that one, still hasn't forgotten when I dropped him as a toddler.
"dropped him as a toddler"
Reminds me of when mine were young and I used to "drop" on of them deliberately - she used to sit on my knees facing me with me holding her hands, and then "fall off" backwards and land on her feet.
I was once bullied into going to a Sure Start centre "to meet other dads". I took her with me and she did the "falling off" thing - to screams of "catch the baby" from the mothers and health-care providers who were there. I was not invited back ;-)
I've been with Three for over 15 years having moved from Vodafone due to their crap service (at least in my semi-rural area). However recently I have been seeing a steady decline in the service provided by Three, including heavily degrade signal strength even though I have line of sight to the transmission station. Three's response to my complaints has been less than helpful, even suggesting at one point that I should move house to get a better service, my response to that is to look at changing to a different provider. If Three and Vodafone do merge then this will only expedite this process.