British mobile phone companies Three UK and Vodafone have agreed to merge their networks and operations. If the deal is approved by regulators, the merged mobile operators will create the largest mobile network in the country.
Vodafone and Three UK are currently the third and fourth largest mobile firms, respectively, but the merger will create a company with around 27 million customers, taking their combined market share past Virgin Media O2, with around 24 million customers, and EE, which has 20 million users.
The Competition and Markets Authority (CMA) will now examine the merger. The regulators will concentrate on whether it will increase customer prices.
While Vodafone and Three both say the deal will be “great for customers, great for the country, great for competition,” the CMA may see things differently.
Speaking to BBC News, Karen Egan, head of mobile at research firm Enders Analysis, said similar deals in other countries had not led to price hikes, but added that “CMA’s hawkish approach to mergers of late is not encouraging.”
The CMA in May blocked UK approval for Microsoft’s proposed $69 billion takeover of Activision Blizzard.
The Unite union, which represents Vodafone and Three workers, has said that the deal was “reckless” and would “hike people’s bills and mean job losses.”
Vodafone has already set out plans to cut 11,000 jobs, with both companies indicating more job cuts within five years if the merger is approved.