UK's CMA said Vodafone/Three merger could lead to higher prices

(Sharecast News) - Britain's competition regulator on Friday said Vodafone and Hutchison Three's £15bn merger could lead to higher prices for consumers and a "substantial" weakening of competition. The Competition and Markets Authority cited the supply of mobile telecommunications services to end customers and the supply of wholesale as two areas of concern but said it would explore solutions with the two companies before it makes its final decision in December.

"We have provisionally concluded that the merger would lead to price increases for tens of millions of mobile customers, or see customers get a reduced service such as smaller data packages in their contracts," the CMA said.

"It would create the largest retail mobile operator by revenue in the UK and the second largest in terms of customers. We consider these findings to be particularly significant given that the parties collectively have over 27 million subscriptions in the UK which would be directly affected by any price rises."

However, the CMA did concede that the merger could lead to better provision of 5G services, with Britain one of Europe's laggards for coverage.

As expected, the two firms rejected the findings, saying the merger "will fix the country's dysfunctional mobile market characteristics, unleashing more competition and investment".

Reporting by Frank Prenesti for Sharecast.com