Vodafone-three inquiry ‘must be scaled up’

A COMPETITION investigation into Vodafone’s £15bn merger with Three must be scaled up, MPS have said.

In a letter to the Competition and Markets Authority (CMA), the business and trade committee warned that significant doubts had been raised about the benefits of combining the two mobile networks.

It said: “As such, the committee believes the CMA has a duty to launch an in-depth (phase two) assessment.”

The CMA last month opened an initial phase one investigation into the tie-up between Vodafone and Three, which will create Britain’s largest mobile network with about 27m customers.

The regulator has been gathering evidence since October and has up to 40 days to examine the deal in its initial review. It will then decide whether to refer the transaction to a more detailed phase two investigation, which would last until autumn.

Vodafone and Three have vowed to invest £11bn in their combined UK 5G network over the next decade and create up to 12,000 new jobs. They have also insisted that the merger will not push up the price of mobile phone bills.

In the letter, Liam Byrne, the committee chairman, pointed to evidence from economists and mobile experts that he said cast doubts over these claims.

Tommaso Valletti, professor of economics at Imperial College London, told MPS in October he had found no evidence that combining networks boosts investment. He also said prices decline slower in markets with three mobile networks than in those with four.

Separately, Vodafone and Three are facing a national security investigation into the deal because of concerns Three’s Hong Kong-based parent company CK Hutchison could be granted access to sensitive national infrastructure. Both Vodafone and Three have rejected the concerns.