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BT challenges Three-Vodafone merger, citing competition concerns

Written by Tue 18 Jun 2024

UK telecommunications company, BT, has submitted a response to the UK Competition and Markets Authority (CMA) criticising the proposed merger between Three and Vodafone.

According to BT’s report, the proposed deal will create a Merged Entity with a disproportionate share of capacity and spectrum which is ‘unprecedented in the UK and Western European mobile markets’. BT added this will substantially lessen competition and deter investment.

BT said it agrees with the CMA’s initial conclusion that the Merger will lead to less investment because the Merged Entity will have access to sensitive information about BT’s investment plans. 

Each of these issues is significant on its own, but together they make the negative impact on competition in the UK mobile market even worse, ultimately affecting UK consumers.

BT supports the CMA’s decision to further investigate these concerns in Phase 2. However, BT also believes the CMA should look closely at the Asymmetry Concern, which is how the Merged Entity’s capacity and spectrum advantages will affect the investment decisions of its rivals and itself.

BT agrees with the CMA’s initial finding that the Merging Parties’ claimed efficiencies seem unproven, are not an improvement on current market outcomes, and will not benefit UK consumers through lower prices or increased investment.

The report also expressed the merger will create a combined entity with a dominant 61% share of the UK mobile network capacity, ‘unprecedented’ in the UK and Western European mobile markets. BT said this will result in a capacity asymmetry between the Merged Entity and the remaining players in the market.

The CMA has launched a more in-depth investigation into the merger, set to run until September 18, 2024. Afterward, it will issue a decision on the deal.

UK Grants Conditional Clearance to Merger

Last month, the British Government conditionally approved the proposed merger between Vodafone and Three UK following a national security assessment of the deal.

The UK’s Cabinet Office stated that security conditions for approving the deal include the companies establishing a “National Security Committee” to oversee sensitive work related to national security.

In September, Unite the Union scrutinised the Vodafone-Three merger, urging the UK Government to assess the connection between Three’s partner company and China.

In the report, Unite the Union said CK Group, Three’s parent company, has connections that could risk national security.

The union claimed that if the merger is approved, CK Group will have ‘significant control’ over the privacy and security of 27 million UK mobile customers.

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Written by Tue 18 Jun 2024

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