LONDON (dpa-AFX) - The UK's Competition and Markets Authority or CMA, on Friday expressed its concerns over the proposed new joint venture between Vodafone UK, a unit of Vodafone Group Plc (VOD.L, VOD), and Three UK, a unit of CK Hutchison Holdings Ltd.
Julie Bon, Phase 1 decision maker for this case at the CMA, said, 'Our initial assessment of this deal has identified concerns which could lead to higher prices for customers and lower investment in UK mobile networks.'
Following a Phase 1 investigation, the two businesses now have five working days to respond with solutions to the CMA, otherwise the deal will be referred to a more in-depth Phase 2 probe.
In its Phase 1 probe findings, the market regulator expressed its concerns that the deal, which combines 2 of the 4 mobile network operators in the UK, could lead to higher prices and lower quality as the JV will reduce rivalry between mobile operators to win new customers.
In contrast, competitive pressure helps to keep prices low, as well as provide an important incentive for network operators to improve their services, including by investing in network quality.
The regulator is also concerned that the deal may make it difficult for smaller mobile 'virtual' network operators such as Sky Mobile, Lebara and Lyca Mobile to offer good deals for their own customers.
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