Vodafone and Three UK promise £10-a-month price cap for some mobile deals
30 September 2024, 12:34
The mobile networks made the commitment in a bid to win over the UK’s competition watchdog.
Vodafone and Three UK have pledged to cap their lowest-cost mobile plans at £10 for two years, as the companies hope to convince the UK’s competition watchdog to approve their £15 billion merger.
The Competition and Markets Authority (CMA) has been investigating the mega-deal since it was announced last summer, and could choose to block it if it thinks customers will be left worse off.
The mobile network giants said they do not agree with the CMA, which provisionally found that the planned tie-up could lead to higher bills for tens of millions of customers.
Nevertheless, Vodafone and Three set out new commitments as part of efforts to address the regulator’s concerns.
We’ve provisionally found that #Vodafone ’s planned merger with #Three could lead to tens of millions of mobile customers in the UK having to pay more.
Ashleye Gunn, CMA Inquiry Group member, explains more ⬇️
Find out more: https://t.co/liOt14nX54 pic.twitter.com/zE0Zeuglxb
— Competition & Markets Authority (@CMAgovUK) September 13, 2024
This included a promise to maintain tariffs at £10 a month, or less, for two years from the completion of the merger, for “value-focused” customers on Smarty deals.
Smarty, which is owned by Three UK and uses the same network, currently offers plans for as little as £5 a month.
The cap would also apply to the Smarty and Voxi For Now social tariffs, which are available for people receiving government benefits. Voxi is Vodafone’s mobile network brand.
The firms said they will also encourage so-called virtual providers to access their network, so smaller operators can offer good deals for customers.
Furthermore, Vodafone and Three reiterated their commitment to invest £11 billion in the UK’s infrastructure, adding that they are “happy for Ofcom to monitor and enforce” the plans.
The CMA had voiced concerns that the investment pledges were “overstated” and may not come to fruition.
Meanwhile, Vodafone also announced that it will be pushing ahead with the tie-up without asking for approval from shareholders.
Changes to UK listing rules, which came into force this year, mean listed companies no longer need shareholder approval for significant transactions such as acquisitions.
The merger would create the UK’s largest mobile phone network with some 27 million customers.
The CMA’s final decision on the deal is due on December 7.
