Vodafone’s mega merger with rival network Three has been given the green light by the competition regulator.
The UK’s Competition and Markets Authority (CMA) has approved a £16.5bn deal in which the two companies will invest up to £1bn in the UK’s 5G mobile network and cap prices for their low-cost phone plans.
The operation creates the largest mobile network in the UK, with 27m customers.
The merger was strongly opposed by competitors EE, owned by BT, and Virgin Media O2.
Confirmed: Vodafone’s mega-merger with rival network Three will create the UK’s biggest mobile network, with 27m customers
Vodafone will hold 51 percent in the new group. Hong Kong conglomerate CK Hutchison owns 49 percent of the trio.
FTSE 100-listed Vodafone has an option to buy a stake in CK three years after the deal, which is now expected to be completed in the first half of next year.
Under the terms of the agreement, the two must spend about £11 billion over the next decade to roll out a 5G mobile network across the UK.
They will also have to freeze the cost of certain phone rates and data plans for three years, and offer pre-paid and fixed-price contracts to virtual network operators, such as Sky Mobile and Giffgaff, which use the infrastructure of other institutions.
Stuart McIntosh, chairman of the special inquiry team leading the investigation into the bond, said: ‘After careful consideration of the evidence, and the range of feedback we have received, we are confident that more consolidation to compete in UK mobile. sector should be allowed to continue – but only if Vodafone and Toru agree to implement our proposed measures.’
Vodafone boss Margherita Della Valle said the deal would create ‘a new dynamic in the UK telecoms market’ and provide customers with ‘wider broadband, faster speeds and better quality connections’.
Vodafone Shares rose 2.4 per cent, or 1.66p, to 71.46p.
Matthew Howett, chief executive of the Research Council, said that while some players, including Sky, would try to appeal the decision through the competition tribunal, such a move would be ‘an uphill battle and a costly one’ , it affects the highest level’.
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