UK watchdog hints Voda-Three merger will likely pass
- Reference: 1730805909
- News link: https://www.theregister.co.uk/2024/11/05/uk_regulator_hints_vodathree_merger/
- Source link:
"We believe this deal has the potential to be pro-competitive for the UK mobile sector if our concerns are addressed," said Stuart McIntosh, chair of the inquiry group leading the investigation at the Competition and Markets Authority (CMA).
"Our provisional view is that binding commitments combined with short-term protections for consumers and wholesale providers would address our concerns while preserving the benefits of this merger.
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"A legally binding network commitment would boost competition in the longer term and the additional measures would protect consumers and wholesale customers while the network upgrades are being rolled out."
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[4]Previous findings from the CMA warned that the merger of Vodafone and Three, Britain's third and fourth largest cellular operators, might lead to higher prices for users and less choice for Mobile Virtual Network Operators (MVNOs) - including Sky Mobile and Lebara - which rely on the physical infrastructure to provide their own services.
The CMA will publish its Remedies Working Paper later today, November 5, setting out what it believes to be appropriate measures to address these concerns. Other interested parties will then have one week - until 1700 on November 12 - to give their responses, with the final decision due before the December 7 statutory deadline.
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These remedies are likely to include a requirement for Vodafone and Three to deliver on their £11 billion ($14 billion) joint network plan, which promises significant joint investment over the next eight years to upgrade their combined infrastructure.
The two telcos issued a report last month claiming their current networks were "outdated" due to lack of investment, and said the proposed merger would unlock the funding needed to deliver a modern [6]5G Standalone (5G SA) infrastructure across most of the UK.
According to the CMA, this would become a legal obligation, to be enforced by both itself and telecoms regulator Ofcom.
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Another commitment is for Voda-Three to retain certain current mobile tariffs and data plans for at least three years to protect customers, especially those using "value" sub-brands operated by the two telcos at the moment. The duo had [8]already pledged to maintain retail mobile tariffs at £10 or below for at least two years after an approved merger.
The third remedy would be a commitment to pre-agreed prices and contract terms (MVNOs), to allow them to obtain competitive wholesale deals.
The two companies have already [9]offered to sell excess spectrum to Virgin Media O2 (VMO2) if their planned amalgamation is given the go-ahead.
Vodafone and Three offered a cautious welcome to the CMA's announcement today, saying they would need to study the Remedies Working Paper in detail, but based on the outline: "We believe it provides a path to final clearance."
Initial reaction from industry watchers is that this merger is now essentially a done deal, for good or ill.
"Vodafone and Three can tentatively order in the champagne," said CCS Insight's director of Consumer and Connectivity, Kester Mann.
"After months of scrutiny, the CMA indicated it is ready to accept the proposed remedies offered by Vodafone and Three to finally allow their planned merger to proceed," he added.
Megabuyte chief analyst Philip Carse said: "One assumes the merger is now pretty much sealed bar the shouting."
He added: "The CMA has until December 7 to publish a final decision on a merger that would create a c. £8.4bn revenue, £1.5bn EBITDA and £1.1bn capex business, with a similar one-third UK mobile market share as EE and VM02," referencing the two biggest mobile operators in the country.
However, not everyone is likely to be happy with this arrangement. BT, which owns EE, has previously said the Voda-Three [10]merger should not be allowed to proceed as it believes this will limit competition.
[11]Game of phones: Voda-Three merger left rivals dialing for help
[12]Three, Voda promise £10-a-month or below mobile tariffs in bid to sway CMA on merger
[13]Vodafone, VMO2 shuffle spectrum to woo watchdog amid merger moves
[14]BT speaks out against Vodafone and Three's mobile marriage plans
Sky said it feared the alliance would limit choice of network operators for its MVNO, Sky Mobile, while the Unite Union expressed concerns over likely price increases for mobile customers, or else a reduced service such as smaller data allowances in contracts.
"The watchdog's statement won't be welcomed by all. BT and Sky Mobile have sternly opposed the deal and are likely to vociferously attempt one final time to have it blocked before the CMA's final deadline in less than five weeks," commented Mann.
"Approval would mark one of the most significant developments in the history of UK mobile, heralding the arrival of a new market leader with over 29 million customers," he added. ®
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[2] 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=44ZypPOnKFsntpXb-3spxVUwAAAMA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[4] https://www.theregister.com/2024/09/13/uk_cma_fears_vodathree_merger/
[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=44ZypPOnKFsntpXb-3spxVUwAAAMA&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2023/04/12/uk_standalone_5g_2023/
[7] 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=33ZypPOnKFsntpXb-3spxVUwAAAMA&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2024/10/01/three_and_voda_offer_commitments/
[9] https://www.theregister.com/2024/07/03/vodafone_vmo2_network_sharing/
[10] https://www.theregister.com/2024/10/09/vodafone_three_merger_remedies/
[11] https://www.theregister.com/2024/10/09/vodafone_three_merger_remedies/
[12] https://www.theregister.com/2024/10/01/three_and_voda_offer_commitments/
[13] https://www.theregister.com/2024/07/03/vodafone_vmo2_network_sharing/
[14] https://www.theregister.com/2024/06/18/cma_vodafone_three_responses/
[15] https://whitepapers.theregister.com/
Re: How about approval only if...
Presenting sensible idea... are you insane?
Security ?
how about they apply some security to their domains/websites
no HSTS or DNSSEC
maybe they should care about the security of their executives email... microsoft suddenly does after they got hacked... deploying DANE
Re: How about approval only if...
Well, that's my hope if this deal goes through. I use 3 for my personal phone and Vodafone for the work device. I can usually get some signal on one or the other, especially on the train, but never both at the same time.
Of course what we'll actually get is them both being equally shit at the same time.
Re: How about approval only if...
You got there first - have exactly the same, 3 as personal, voda as work.
I reckon there's some kind of sharing already in place as several months ago I suddenly got signal on 3 where there was none before but I always got voda at those points.
Re: How about approval only if...
> what we'll actually get is them both being equally shit at the same time
Good news- post-merger, their services *will* be effectively those of Vodafone AND Three!
Bad news- that's a boolean "AND"!
Re: How about approval only if...
If you want that, you remove their ability to deploy their own masts entirely and make them contribute to a centralised cooperative that manages the masts which they have to fund.
Nationalise the infrastructure, privatise the commercials running on top.
There's no reason for any of these companies to be anything but an MVNO with infrastructure for all being funded by all.
Rather than, say, erect one pole for Three, another for BT, another for EE, etc. in the same locations and then having to have them all enter into sharing agreements and all being unwilling to fund anything further because they're just paying for access to their rival's masts and it's up to the rival to bother to upgrade them.
Re: How about approval only if...
This is what I have been saying for years, having multiple different networks just adds both infrastructure inefficiency and spectrum efficiency.
Re: How about approval only if...
"If you want that, you remove their ability to deploy their own masts entirely and make them contribute to a centralised cooperative that manages the masts which they have to fund."
You appear unaware that Vodafone & O2 have an existing mast-sharing arrangement in place (via a jointly-owned company) for some years and likewise EE & Three have an existing mast-sharing arrangement in place (via a jointly owned company) for some years as well. Obviously as part of a Vodafone / Three merger going through both Vodafone and Three will almost certainly extract themselves from their existing mast-sharing arrangements with O2 and EE.
"unwilling to fund anything further because they're just paying for access to their rival's masts and it's up to the rival to bother to upgrade them."
How exactly do you upgrade a *mast* rather than the equipment mounted on or connected to, a mast? Do you upgrade it by making it taller?
Under the current mast-sharing arrangements the pairs of OpCos involved have their own antennas mounted on each mast and their own equipment etc sited in their own cabinets adjacent to the masts, it is only the mast that is shared.
and the key words "short-term customer safeguards against higher bills." to us we would like maybe a couple of years, to V3 that's more likely 6 months or to the next round of price rises and then expect some big jumps from all the providers in a co-ordinated monopolistic cartel round of increases, support by their pet regulator.
Why not long term safeguards?
I've never understood when they decide short-term safeguards are needed what is going to change to make long term safeguards unnecessary?
Removing competition won't help consumers.
Plenty of bonuses in the board room though, and we all know that's what really matters when it comes to infrastructure.
Re: Removing competition won't help consumers.
I'm currently in a country with a much smaller population than the UK where there are three spectrum holders. That should be plenty to ensure a competitive market, but in practice, there's almost no competition at all: the prices are almost indistinguishable and the operators get away with ancient practices such as charging a "line rental" for PAYG mobile phones in the event you don't make calls. The customer service is universally dreadful - to the extent that they will even refuse to cancel a service that's out of contract because of their retention targets.
The problem is not the number of operators, per se, but the incentives to compete. Reducing "churn" here (long contracts, complex bundles and outright refusal to cancel) is seen to be more important than competition (which would merely increase churn). The UK market is (somewhat) more competitive precisely because there are smaller operators that have to fight harder for revenue. As soon as there are three incumbents of roughly equal market dominance they'll find it's more to their advantage to hold their existing customers hostage than have an awkard minority shopping around.
Re: Removing competition won't help consumers.
It seems I'm literally a couple of days out of date and a new kid has just arrived on the block and has acquired spectrum (not just an MVNO), as well as offering fibre broadband. This is partly due to regulatory action against an incumbent.
Mobile costs seem to be about a third of their nearest present competitor and fibre broadband at 1Gb/s is about a quarter of the cost of the nearest competitor with a minimum contract of months rather than years.
Whether it works out in the long run remains to be seen - but it does illustrate that you need new entrants to the market to spur competition, not a consolidation of existing ones.
The two telcos issued a report last month claiming their current networks were "outdated" due to lack of investment...
Err - OK. I am intrigued. Just where did the money get 'invested' then? What was so important that investments in the respective networks had to be used elsewhere? It smells of mismanagement to me...
Bonuses to the board is never considered mismanagement.
In Huawei kit, which an arbitrary government decision then forced them to remove.
Best part of a billion had to be spent just to get back to where they were.
What does Ofcom have to say…
“ The two telcos issued a report last month claiming their current networks were "outdated" due to lack of investment”
Perhaps the CMA needs to talk to OFCOM, as the above inflation annual price increases were supposed to be to fund network investment. So it would seem monies have been diverted…
Re: What does Ofcom have to say…
To set up the bail out?
No good will come of this
That is all
Lots to unpick
Vodafone and Three already do mast-sharing, but not with each other.
Vodafone and O2 have a joint venture called Cornerstone while EE and Three have a joint venture called MBNL.
Why bother with a regulator?!
Between microshit/Activision; broadcom/vmware; not vodafone/3...add to that the willingness to sell ARM. None of this is our was good for consumers. Every merger has been bad for prices, innovation & customer service.
Just more pointless shit that will see prices rise across the board & the shite, almost unusable mobile networks we have in this country get even worse
Re: Why bother with a regulator?!
We call this Enshittification.
It could be good
I recently moved from Three to Vodafone, because I was sick of Three's patchy coverage.
Vodafone was no better. So I cancelled in my cooling off period.
I tried an EE PAYG SIM and had good coverage where I needed it. Then I set up an account with 1p mobile who are a MVNO using EE's network. My coverage is now brilliant.
Remember, EE is a merger of two networks, Orange and T-Mobile. So, by merging, they created an actually usable network. Perhaps Three and Vodafone can do the same.
As for costs, MVNOs are often going to give a better deal for most people, if you can shop around in a savvy way and know exactly what you need and what frills you can do without (including for example bi-yearly phone updates on payment plans).
How about approval only if...
...they deliver roaming-capable (i.e. accessible to O2 and EE customers and their MVNOs) proper usable 5G coverage to every single metre of every single railway line and motorway in the country (and yes, that includes tunnels).
Then at least as a country we'll have something useful out of them before we all inevitably get shafted by price rises.