BT pushes back against Vodafone–Three merger

This week, the Competition and Markets Authority (CMA) has published ten responses to an issues statement that was released in May, which invited parties to provide submissions commenting on the issues and possible remedies for the merger

Among them is the response from UK incumbent BT, who released a 40-page report. The company claims that the proposed merger will “create a Merged Entity with a disproportionate share of capacity and spectrum, unprecedented in UK and Western European mobile markets, which will substantially lessen competition and deter investment.” According to the report, the merged entity would have a 61% share of the UK mobile network capacity, an unprecedented amount in UK and Western Europe mobile markets.

BT say that the merger would result in “higher prices, poorer network quality, and reduced incentives to invest – all to the detriment of UK consumers.”

Such comments from the UK market leader are to be expected, as the merger puts its top position under threat. Speaking to The Times, Ahmed Essam, Vodafone’s chief executive of European Markets, said that the company is not surprised by BT’s comments, but it was pleasing to see support from other big players, such as Swedish giant Ericsson,

“Currently the UK mobile sector needs investment, with two large and two sub-scale players. We firmly believe creating a third mobile network operator, with the scale to invest and compete, will strengthen competition in the UK’s mobile market, benefiting customers and the wider UK economy,” concluded Essam.

“Consolidation is broadly seen as a pivotal measure towards helping operators to attain the necessary scale for expanding their future network infrastructure,” said Ericsson’s supportive response.

“Consequently, it should facilitate the delivery of the high-quality service, high bandwidth, and extensive coverage needed to fully harness the economic and social benefits of nationwide 5G standalone (5G SA) networks,” the response continued.

Last month, The UK government released a “Publication of notice of Final Order” that provisionally approves the Vodafone–Three merger, subject to certain conditions. The CMA investigation, which is separate and ongoing, began its second phase in April. The results are expected in September.