A greenish light: Vodafone/Three merger provisional findings
The CMA's provisional findings on the Vodafone/Three merger reiterate its concerns around the impact on the retail and wholesale market but its previous issues regarding mobile towers sharing with BT/EE have been satisfied
Crucially, the CMA seems somewhat dismissive of structural remedies, although hasn't ruled them out entirely. Remedies sought in the form of network and pricing commitments seem somewhat unnecessary, but nonetheless workable
We now expect the Vodafone Three merger to gain approval in December, with remedy detail negotiated over the coming months—a very significant positive development for the sector
Related reports
Spectrum and towers: Market-changing telco deal
3 July 2024Vodafone/H3G/VMO2 have announced a spectrum-trading and towers-sharing deal, allaying potential spectrum concerns around the proposed Vodafone/H3G merger, although BT may argue that it is short of some critical spectrum bands.
The towers sharing agreement incorporates H3G spectrum into the VMO2/Vodafone Beacon agreement and appears to expand the agreement onto some of H3G's current sites.
We estimate a c.70% increase in VMO2 capacity from this deal and 5% for the industry as a whole (in addition to the 25% from the Vodafone/Three merger). BT/EE made a strong argument for spectrum reallocation in its merger objection, and some validity to that argument may or may not remain post-trade
Moving swiftly on: Vodafone/Three merger Phase 1
22 March 2024The CMA's Phase 1 conclusions document is largely as expected, extending to Phase 2 which looks set to conclude towards the end of the year.
The impact on both the retail and wholesale markets will be investigated, and the CMA will want to bed down its view of the counter-factual and the likely merger efficiencies. The impact on network sharing is also an issue, but spectrum reallocation was not mentioned.
We continue to see a solid case to allay these concerns, with the resultant capacity uplift key to both the wholesale and retail markets.
Changing shape: Vodafone M&A and dividend cut
15 March 2024Vodafone has finalised its deal to sell its Italian business to Swisscom for €8bn, opting for greater regulatory certainty and higher upfront proceeds rather than a potentially higher offer from Iliad for an Italian JV.
The company has grasped the nettle on the trailed dividend cut, bringing the announcement forward from the expected May timing, and halving the payout.
The company is highlighting how well it is positioned to grow now without Italy and Spain, and with the prospect of a better position in the UK. Germany will be more important than ever in this growth equation.
The end of the beginning: Vodafone/Three merger
26 January 2024The CMA has announced the launch of its Phase 1 review of the proposed Vodafone/Three merger, with the timeline suggesting a Phase 1 conclusion in late March and a Phase 2 decision around September/October.
The main focus is likely to be whether the merger would lead to a substantial lessening in competition (SLC), with the companies' varied market positioning helpful in this regard.
The merger's prospective 'countervailing factors' are substantial, with an estimated 25-50% increase in sector capacity further strengthening the imperative for the operators to get customers signed up.
Spectrum and towers: Market-changing telco deal
3 July 2024Vodafone/H3G/VMO2 have announced a spectrum-trading and towers-sharing deal, allaying potential spectrum concerns around the proposed Vodafone/H3G merger, although BT may argue that it is short of some critical spectrum bands.
The towers sharing agreement incorporates H3G spectrum into the VMO2/Vodafone Beacon agreement and appears to expand the agreement onto some of H3G's current sites.
We estimate a c.70% increase in VMO2 capacity from this deal and 5% for the industry as a whole (in addition to the 25% from the Vodafone/Three merger). BT/EE made a strong argument for spectrum reallocation in its merger objection, and some validity to that argument may or may not remain post-trade
Moving swiftly on: Vodafone/Three merger Phase 1
22 March 2024The CMA's Phase 1 conclusions document is largely as expected, extending to Phase 2 which looks set to conclude towards the end of the year.
The impact on both the retail and wholesale markets will be investigated, and the CMA will want to bed down its view of the counter-factual and the likely merger efficiencies. The impact on network sharing is also an issue, but spectrum reallocation was not mentioned.
We continue to see a solid case to allay these concerns, with the resultant capacity uplift key to both the wholesale and retail markets.
Changing shape: Vodafone M&A and dividend cut
15 March 2024Vodafone has finalised its deal to sell its Italian business to Swisscom for €8bn, opting for greater regulatory certainty and higher upfront proceeds rather than a potentially higher offer from Iliad for an Italian JV.
The company has grasped the nettle on the trailed dividend cut, bringing the announcement forward from the expected May timing, and halving the payout.
The company is highlighting how well it is positioned to grow now without Italy and Spain, and with the prospect of a better position in the UK. Germany will be more important than ever in this growth equation.
The end of the beginning: Vodafone/Three merger
26 January 2024The CMA has announced the launch of its Phase 1 review of the proposed Vodafone/Three merger, with the timeline suggesting a Phase 1 conclusion in late March and a Phase 2 decision around September/October.
The main focus is likely to be whether the merger would lead to a substantial lessening in competition (SLC), with the companies' varied market positioning helpful in this regard.
The merger's prospective 'countervailing factors' are substantial, with an estimated 25-50% increase in sector capacity further strengthening the imperative for the operators to get customers signed up.