Vodafone and Three have pledged to maintain tariffs for their SMARTY and VOXI MVNO customers.at £10 or below for two years from the completion of the proposed merger of the two networks.
They say they will also provide a pricing framework that encourages other MVNOs to access their additional network capacity. Upon approval of the merger, Vodafone and Three have also agreed to sell spectrum to Virgin Media O2.
Concerns
The Competition and Mergers Authority has concerns about price increases resulting from the merger of Vodafone and Three. But these are unfounded, say the two networks.
In a statement issued in response to the CMA’s findings that the merger could lead to price rises, both Vodafone and Three say they strongly believe the merger is pro-competitive and remain confident that outstanding issues can be resolved.
“Vodafone and Three disagree with the CMA’s Provisional Findings. Our merger will be pro-growth, pro-customer, pro-investment, and pro-competitive for the UK. It is a once-in-a-generation opportunity to transform UK digital infrastructure with £11 billion of network investment,” said a joint statement.
“We continue to constructively engage with the CMA and remain confident that we can work with them to secure approval. Our £11 billion network investment commitment will ensure UK customers enjoy one of Europe’s most advanced networks, and it will level the playing field with the two larger players to drive competitiveness. We are happy for Ofcom to monitor and enforce this commitment. The merger will extend the network quality benefits well beyond the merged company’s own customer base, by extending it to VMO2’s direct and MVNO customers.
“This agreement will deliver better quality, enhanced capacity, and greater coverage to over 50 million mobile customers across the country.. The CMA’s final decision on the merger is not due until 7 December, and we will continue to positively engage with them to resolve outstanding matters.”
Analyst Paolo Pescatore called the statement “unsurprisingly defiant.”
He added, “They still largely disagree with the remedies, but encouragingly show a clear willingness to work closely on a number of areas, such as the commitment to investment over the long term, a price freeze on selected tariffs under £10 for two years, and collaboration to increase competition in wholesale. It remains to be seen if the entity has done enough on pricing to ease the CMA’s concerns. This could be the sticking point that makes or breaks the deal. A path to approval exists, which is key for all parties.”
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