Vodafone and Hutchison offer price pledge to answer UK's merger concerns

Vodafone and Hutchison's Three UK said they would commit to keep prices low on their value brand for two years and give better access to wholesale operators in a final push to get their $19 billion British merger over the line.

Britain's antitrust regulator, the Competition and Markets Authority (CMA), is due to make its decision on the tie-up between the two mobile operators by Dec. 7 after it expressed concerns about its impact on consumers earlier this month.

The CMA had said the deal, which reduces the number of networks in Britain from four to three, could push up prices for customers.
 

 

But the regulator had also signalled the deal could be cleared if the two parties could guarantee it would be positive for consumers, network quality and wholesale competitors like Sky Mobile.
 

The companies said in response they would maintain prices on the SMARTY value brand, which has more than 1 million customers, at 10 pounds ($13.40) or below, keep social tariffs and exclude vulnerable customers from mid-contract price rises, according to a submission to the CMA published on Monday.
 

They said they were also prepared to commit to offer access to their joint network on pre-agreed terms to third-party operators with 2.5 million or fewer customers.
 

The merger will create a market-leading competitor to BT's EE and Virgin Media O2 .
 

Vodafone and Three UK said on Monday they disagreed with the CMA's concerns about consumer prices, and pointed to their existing promises to invest 11 billion pounds in their joint network and sell some of their combined spectrum to VMO2.

But they said they would offer the additional pledges on consumer prices and network access as part of a final push to get the deal cleared.
 

"We will continue to positively engage with them (the CMA) to resolve outstanding matters," they said in a statement.

Shares in Vodafone were trading down 0.3% at midday, in line with the FTSE 100.