(Bloomberg) -- The £15 billion ($19.5 billion) merger between Vodafone Group Plc and Three would be approved if the firms committed to investing in a large scale upgrade of the UK’s mobile network.
The Competition and Markets Authority also said Tuesday that measures to protect customers should be put in place to prevent price increases. The watchdog will make a final decision on Dec. 7.
The deal with the UK unit of the billionaire Li family’s CK Hutchison Holdings Ltd. would combine the two smallest of the country’s four mobile operators to create the largest by revenue. Vodafone and Three have argued that the deal will improve British mobile service, which lags behind much of the rest of Europe.
“The UK will be better off if, as seems, this merger is finally approved,” Karen Egan, at Enders Research,said in a LinkedIn post. Blocking the deal “would not have yielded a positive outcome for the economy or consumers.”
Vodafone has said the companies will commit to £11 billion in investment in the combined company and that it’s willing to have the UK’s communications regulator monitor the plan’s execution. It also said that it expects prices for mobile customers will remain flat or decrease because of more competition in the wholesale market.
The CMA has provisionally found that a commitment to carry out the network investment program would significantly improve the quality of the merged company’s mobile network and boost competition between mobile network operators.
“The merger is a once-in-a-generation opportunity to transform the UK’s digital infrastructure – which lags significantly behind its European peers,” the companies said in a statement.
--With assistance from Jillian Deutsch.
(Updates throughout)
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