The UK’s Competition and Markets Authority (CMA) has indicated that Vodafone’s £15 billion ($19.5 billion) merger with Three could go ahead, provided the Companies agree to a series of remedies aimed at alleviating competition concerns, according to a detailed report from CNBC.

In a statement released on Tuesday, the CMA outlined several conditions that Vodafone and Three must meet for the deal to gain final approval by December 7, the CNBC report further explains.

The merger, first announced in June 2023, would create one of the UK’s largest telecommunications providers, combining Vodafone’s mobile network with Hong Kong-based Three’s CK Hutchison. Together, the companies could challenge the dominance of rival operators EE and O2, but the deal has raised concerns about its potential impact on prices and competition.

The CMA’s provisional approval is contingent on Vodafone and Three committing to substantial investment in the UK’s telecommunications infrastructure and adopting near-term protections for customers and mobile network operators virtual (MVNO).

Specifically, the two companies are to commit to investing £11 billion ($14.46 billion) in network upgrades over the next eight years, a move that Vodafone says will help bridge the gap. UK digital infrastructure deficit.

Additionally, they must ensure that existing mobile tariffs and data plans remain unchanged for at least three years, ensuring stable prices for current and future customers. This will help to control competition issues.

Furthermore, in an effort to preserve competition in the wholesale market, the merger would require Vodafone and Three to offer fair prices and contractual terms to MVNOs, which rely on third-party infrastructure for their services. Firms would also be required to provide regular updates to the telecoms regulator, Ofcom and the CMA, on their progress.

A pro-competition merger for the British mobile sector

Despite the CMA’s preliminary concerns that the merger could lead to higher prices for consumers and less competition, the regulator believes these remedies, along with protections given to smaller suppliers, would reduce risks while preserving the advantages of consolidation. Stuart McIntosh, who is leading the CMA investigation, noted that the merger could ultimately be “pro-competitive” for the UK mobile sector.

Vodafone has welcomed the CMA’s proposed framework, with a spokesperson telling CNBC that it provides a “pathway to final authorization” and that the merger will result in “significant benefits” for businesses and consumers, including improved 5G coverage in schools and hospitals across the country.

However, some players in the sector remain opposed to this agreement. BT, the UK’s largest telecoms provider, and MVNOs such as Sky Mobile, have warned the merger could reduce competition and lead to higher prices. Kester Mann, director of CCS Insight, called the CMA’s announcement “a big step forward” but predicted opponents of the deal would continue to lobby against the deal ahead of a final decision.

If approved, the merger would reduce the number of UK mobile operators from four to three, with Vodafone holding 51 per cent of the combined business and CK Hutchison retaining the remaining stake.