UK regulator finds Vodafone and Three merger would lead to price rises, seeks remedies for deal

Britain's competition watchdog on Friday said it found competition concerns with the proposed merger between Vodafone and the Three UK mobile network owned by CK Hutchison.

The U.K. Competition and Markets Authority (CMA) said the deal would lead to price increases for tens of millions of customers or see some users get reduced services. The regulator also warned of a negative impact for so-called Mobile Virtual Network Operators (MVNOs), which piggyback on existing infrastructure.

"The CMA has provisionally concluded that the merger would lead to a substantial lessening of competition in the UK – in both retail and wholesale mobile markets," the regulator said in a press release.

Vodafone and CK Hutchison's transaction, which was announced last year, would merge the two brands' U.K. businesses, giving Vodafone a 51% controlling stake and leaving CK Hutchison with the minority interest. 

But the CMA opened an antitrust probe in to the deal in January and announced an in-depth investigation in April.

The regulator said Friday the merger would result in higher prices or reduced services, and could "negatively affect those customers least able to afford mobile services."

Vodafone and Three U.K.'s merger would also reduce the number of major telecommunications network players from four to three, the regulator said, adding that this could make it harder for MVNOs to secure competitive deals which may reduce their ability to offer competitive rates to customers.

The CMA did however recognize that the deal "could improve the quality of mobile networks and bring forward the deployment of next generation 5G networks and services," which the two merging networks have claimed.

However, the CMA said those claims could be "overstated" and