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Spectrum and towers: Market-changing telco deal

3 July 2024
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Vodafone/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

 

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  • Moving swiftly on: Vodafone/Three merger Phase 1

    22 March 2024

    The 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.

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    The 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.

    Access report