The highly anticipated Vodafone and Three merger has been approved by the Competition and Markets Authority (CMA) on the condition that each company sign binding commitments.

The long-awaited approval means that Vodafone and Three would be able to combine their telecoms offering under one conglomerate, similar to the other two major mobile network operators, BTEE and Virgin Media O2.

Under the terms, both companies would have to sign binding commitments to invest billions to roll out a combined 5G network across the UK, which would be overseen by Ofcom and the CMA.

This commitment would be supported by shorter term customer protections which would require the merged company to cap certain mobile tariffs and offer preset contractual terms to mobile virtual network operators, for a period of three years.

In earlier phases of the CMA’s probe, the merger was provisionally found to potentially lead to higher prices for consumers and less advantageous terms for virtual network providers, which depend on networks like Vodafone and Three to supply their own retail customers.

Since then, the inquiry group has presented remedies to its concerns and engaged with relevant parties to see if these conditions would provide relief to their concerns, now finding that under the network commitment conditions, the merger can proceed.

The joint network plan stipulation will require a network upgrade, integration, and improvements the companies will make over the next eight years.

The CMA says that this improvement to the combined network would boost overall competition between mobile network operators in the long term.

Further, Vodafone and Three will have to cap selected mobile tariffs and data plans for three years, directly protecting large numbers of customers from short-term price rises in the early years of the network plan.

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The CMA is also requiring the companies to pre-set prices and contract terms for wholesale services to ensure that virtual network providers can obtain competitive terms and conditions as the network plan is rolled out.

“It’s crucial this merger doesn’t harm competition, which is why we’ve spent time considering how it could impact the telecoms market,” Stuart McIntosh, chair of the independent inquiry group leading the investigation, said.

“Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.

“Both Ofcom and the CMA would oversee the implementation of these legally binding commitments, which would help enhance the UK’s 5G capability whilst preserving effective competition in the sector.”

CMA Launches Formal Investigation Into Vodafone/Three Merger