Getty ImagesVodafone’s boss has insisted the telecoms giant’s merger with rival Three – which has finally been approved by the regulator – will not result in higher prices.
The £16.5bn deal will create the UK’s largest mobile network, with 27 million customers.
This is conditional on the merged companies agreeing to invest billions in the country’s 5G network and capping certain mobile tariffs.
Vodafone chief executive Margarita Della Valle told BBC Radio Four’s Today program that the deal would be “self-funded”, meaning there would be “no additional cost from public funding and no additional cost to our customers”. It won’t happen.”
The regulator, the Competition and Markets Authority (CMA), had previously raised concerns that the deal could increase people’s bills.
But Stuart Mackintosh, who led the watchdog’s investigation into the merger, said: Now it was concluded This was “likely to promote competition” in the mobile sector and should be allowed to proceed.
“For retail customers, we will require parties to protect existing and future customers, including customers of their sub-brands, from short-term price increases during the initial implementation of network plans,” he said. Limit prices for selected projects.” .
The CMA has not specified which pricing plans will be protected or for how long.
The rising cost of mobile phone contracts and other digital services is one. An issue of concern to regulators As the speed of UK 5G rollout.
‘The Waiting Game’
“It was a historic moment,” said CCS Insight analyst Kester Mann.
“This mega-merger is one of the most important moments in the history of UK mobile,” he told the BBC.
He added that “it seems to strike a good balance between fostering competition and encouraging investment on a large scale.”
Industry analyst Paolo Pescatore told BBC News it was still a “waiting game” in terms of assessing the tie-up’s impact.
“The bottom line is that it will take many years to realize the full merits of the agreement, and there are many tough decisions to come,” he said.
Mr Pescatore also said that “it is now up to both parties to deliver on their commitments”, but “this should mean a win for UKPLC – bringing much-needed investment into the network – And in the form of better services for customers.”
This is the latest example of consolidation in the UK mobile market.
In 2010, Orange and T-Mobile emerged to form EE, which itself was taken over by BT in 2016.
Then, in 2021, the CMA approved the £31bn merger of Virgin Media and O2.
These deals were followed by job cuts. EE eliminated 1,200 characters. In the months following the Orange and T-Mobile merger, then a An additional 550 jobs next year.
Vodafone and Three have previously claimed that their merger would create thousands of new jobs.
But the union Unite has warned in the past that the deal could happen. Add an extra £300 a year to consumer bills.and lead to the loss of “up to 1,600 jobs”.