Watchdog reluctantly blesses Vodafone-Three merger – with strings attached

The UK's competition watchdog is doubtful Vodafone and Three will fulfill post-merger promises unless forced to, and wants safeguards put in place so the telcos don't hike consumer prices or water down the £11 billion network infrastructure upgrade they commited to. The Competition and Markets Authority (CMA) disclosed last …

[John Geddes]

Monitoring by Ofcom - not a serious remedy

"Telco regulator Ofcom would serve as a monitoring trustee to hold their feet to the fire."

I'll not hold my breath, then.

Look at how effective Ofcom have been in enforcing its 's rules on the transition from analogue landlines (not at all) - Ofcom is "all mouth and no trousers" - specialising in sounding tough, but choising not to look for problems (and refusing to hear about systatic abuses even when you try to show them evidence). Looks like a classic case of regulatory capture.

[Doctor Syntax]

Re: Monitoring by Ofcom - not a serious remedy

Given that analogue landlines provide far better resilience than digital the real issue there was allowing it in the first place.

[Sir Sham Cad]

Cool. Just as we're looking to refresh/renew our Vodafone mobile contract. This will definitely not shit that right up at all, oh no.

[Anonymous Coward]

It will very likely not affect Vodafone customers too much other than pricings.

Quality and everything else should improve.

[R Soul]

Merger confusion

This merger will mean we get one shit mobile telco instead of two shit telcos. That has to be a good thing, hasn't it?

[Jess--]

So at the end of it we end up with the same three main operators we had 20+ years ago but with different names

Vodafone (now becomes Vodathree)

Cellnet (now VM02)

T-Mobile (now BT/EE)

from memory Virgin mobile used to be part of T-Mobile and BT were part of Cellnet

[Doctor Syntax]

In fact at one time we had 4. The original pair of Cellnet (mostly BT owned) and Vodaphone followed by the second pair, One2one and Orange. Now we have 3.

[phuzz]

Somehow I'd not noticed until now that BT sold their share in O2(nee Cellnet), and then ten years later bought into one of it's rivals (EE). Sounds like some proper 'management expertise' going on there. Presumably they're not getting ready to sell EE and buy into VodaThree instead.

[Roland6]

Due the UK competition/duopoly restrictions on BT, it was easier to divest their mobile operations into mmO2, wait a few years to be free of the restrictions and then buy EE - formed from the merger of Orange UK with T-Mobile.

Interesting, Vodafone briefly owned Orange UK, through its takeover of Mannesmann, but competition regulators required them to sell Orange. As part of the takeover, Vodafone agreed to keep the Mannesmann brand and name, but shortly after concluding the deal reneged and rebranded….

[Anonymous Coward]

Irony

I think it's ironic that the largest operator (EE) is objecting to a merger. Understandable as a new Vodafone/3 could offer more competition, but it's more that they became the biggest by merging two (T-Mobile and Orange).

Regarding service, we all have our own views and, for me, Vodafone have been good - I started using them in 1992 and have continued ever since. Their signal in my local area isn't the best (though it's better than EE) but it's not a problem as I have wifi calling to fill the gaps. In 32 years, Vodafone have never failed when I've needed them and I'm quite happy with their prices - I renew a month or so before my contract expires and usually get a bit more for the money. I've also got O2 and 3 PAYG SIMs (that only need the occasional call to keep active - never needed to top up in the past few years) - I'm often in quite rural areas and they're just in case Vodafone were to go down when I really need to make a call - but they remain unneeded so far.

It's also ironic that I've always received good service from BT for my landline and broadband. Perhaps my job has made me more realistic with expectations. No large company is able to provide a perfect service (despite my career having been to help many do so): people (staff and management) are not infallible, and some even worse.

Of course, others have had problems and I understand all the criticism that gets written.

[Doctor Syntax]

I'm not sure about what spin they put on it but I suspect BT management didn't really trust anything that didn't use wires. Whatever the explanation it was a result of the levels of foresight, flair, judgement, and general competence that's characterised every generation of top BT manglement. If they'd really wanted it I'm sure they'd have worked around the regulatory issues one way or another. And the purchase of EE was partly by shares so BT ended up with a very substantial chumk of themselves owned by Deutsche Telekom.

[Anonymous Coward]

"Sounds like some proper 'management expertise' going on there."

Yupe, I seem to remember BT selling off "Yellow Pages" (aka Yell) in 2001 and then buying a rival directory enquiries business a couple of years later.

[sayhey]

Mannesmann

BT spun off O2, then pretty much immediately said it was a mistake to sell O2. Then went to rebuy O2 years later before France Telecom (Orange) and Deutsche Telekom (T-Mobile) convinced them EE was a better purchase.

For a very short time around 2001 Vodafone owned Orange when It took over Mannesmann, who owned Orange at the time. They were made to sell it as one of the conditions of buying Mannesmann because the thought of them owning two networks in the UK was anti-competitive and would cause an overall reduction in the number of operators from 4 to 3; 4 being seen as the minimum amount of networks needed for a competitive market. Seems times have changed since then.

[Doctor Syntax]

I think by that time they'd taken over CellNet entirely - it was originally 20% owned by a security company (Group 4 IIRC). They didn't actually sell it off, they created a new company so that each share of BT as was became a share of BT as is and a share of O2. O2 consisted of the network operation and the retail side which had long been a part of BT.* It was then taken over by Telefonica.

* To the mutual dissatisfaction of both, I think; certainly within BT Mobile "Big BT" was a term of disparagement. I'm sure Big BT returned the - err - ?compliment.

[Roland6]

Network divesture...

At least the Remedies Working Paper acknowledges a network divesture is an option, personally, I would have put it as the prime condition on the merger going ahead.

[Martin an gof]

Low-end tariffs

Our family's phones are spread around the operators because often (still! 30 years after the launch of GSM in the UK!) we find patches where one operator doesn't have a signal while another does. Some years ago we had a slightly frustrating holiday in mid-Wales, where the four phones we had with us were all on EE, and in the place we were staying they all said "Emergency Calls Only" which implies they could see another network - just not EE! (The holiday was lovely, and being incommunicado should have been great, but with elderly relatives at home it was slightly worrying that they couldn't call us).

Well, I say spread-around. They are on EE, O2 and Three, directly in just one case, via MVNOs in all the others. Why not Voda? Because we couldn't find a decent offering at a similar price to (say) GiffGaff (O2's in-house MVNO) or Smarty (Three's in-house MVNO). Last time I looked, Voxi (Vodafone's equivalent) was not at all competitive, and most of the other MVNOs you might consider are with EE. In fact EE seems to have the lion's share of MVNOs. I'm really worried that VodaThree will get rid of Smarty which has worked well for a couple of our low-use phones and hasn't had a price rise for several years.

Looking at the elderly relatives, one of the companies making those emergency call buttons has one model which uses the mobile networks to communicate. It has a "special" contract which isn't terribly expensive in the grand scheme of things and allows the device to roam across all four networks, whichever has best coverage. Short of running two SIMs with two separate operators, I don't think there's a way for Joe Bloggs to do that, is there?

M.

[dotdavid]

Re: Low-end tariffs

Honest Mobile are trialling what they call a "Smart eSIM" which provides backup roaming data access for certain applications (like WhatsApp) via other UK networks when you don't have any signal. I'm not really sure how well it works or how you would go about signing up for it.

[ARGO]

Re: Low-end tariffs

It works as well as you can expect within the limits of 3GPP standards - in particular it won't switch networks until the one you are on loses signal completely. And that includes 2G signal, which isn't really compatible with modern apps. The list of permitted apps is limited but growing. And you get the same service abroad at no extra cost.

If you want full access I think Manx (and maybe Jersey) Telecom still offer roaming SIMs for all the UK networks. But they are rather more pricey than Honest's £5 per month.

[Missing Semicolon]

Re: Low-end tariffs

Lebara is the tenner-a-month MVNO for Voda.

[Martin an gof]

Re: Low-end tariffs

Both GiffGaff (O2) and Smarty (Three) have a selection of deals under £10. Currently £6/mo gets you 5GB on Smarty, for example.

M.

[Anonymous Coward]

Re: Low-end tariffs

If you're with Three UK Business or EE Business, you can get unlimited data for less than £5 per month.

[Anonymous Coward]

Re: Low-end tariffs

not sure where you get the idea EE has a lot of MNVO's

Last I looked for the mother in law in summer, only 1 was EE and they were dodgy as fuck, EE seemed to have sold them a second tier service that basically sent all calls to voicemail instead of ringing the actual phone that had signal.

and as she insisted only EE worked in the village, in the end she ended up on a more expensive EE package.

[Martin an gof]

Re: Low-end tariffs

Obviously it changes all the time, but of the 19 "active" MVNOs listed in this Wikipedia article, 8 are with EE, 4 with Vodafone, 3 with Three and 3 with O2. Note that EE doesn't have an in-house MVNO so in a way that's 8, 3, 2 and 2. I think that counts as quite a lot with EE given that even if Voda and Three do merge they will still have fewer MVNOs than EE, and a few years ago, when there were more MVNOs, EE had even more of a share. Of the 32 "defunct" MVNOs listed on the same page, 17 (over half) were with EE or the pre-merger Orange or T-Mobile.

M.

[Anonymous Coward]

Re: Low-end tariffs

I should probably update that Wikipedia page but here are the updated numbers.

EE has 17 MVNOs, Three UK has 6 MVNOs, O2 has 4 MVNOs, Vodafone has 4 MVNOs.

[Martin an gof]

Re: Low-end tariffs

That's quite a difference but rather reinforces my point that EE has the most MVNOs.

M.

[rjsmall]

A bit two faced for BT/EE to be complaining about other operators merging when it was the result of BT and EE merging after Orange and T-Mobile had merged to form EE.

It might be more useful if the CMA applied some of the proposed merger conditions to all three of the resultant operators.

[Anonymous Coward]

It is very bitter of BT/EE to be behaving in such a way knowing full well they came to have their market dominance only as a result of their own mergers.

If they want more competition in the market, maybe they should be force to de-merge. I miss Orange Wednesdays.

[Anonymous Coward]

You got an Orange Wednesday last week .. courtesy of the USA .... what's not to like ? /s

[OhNoooo]

"On price protections, BT/EE .. Partly, its argument seems to be that other operators will want to raise prices in line with inflation"

So the deal can't go ahead as we want to fleece our customer for RPI + 3%, rounded up to the nearest £5 every year

[Anonymous Coward]

RPI + 3% has been axed anyways. Three, EE, Vodafone has updated their pricings. O2 started to update their pricings recently. It's a flat rate now but still sort of expensive depending on which SIM plan you're on and how much you're paying.

[firu toddo]

We need to upgrade you.....

Had SIM only deals from Three for years. My current SIM(s), Unlimited calls/texts and 12 gig data, are now out of contract and roll over each month at 7and a half quid a month. And no stupid compounded price increases. But they took roaming off me after brexit despite promising not to.

You can probably guess I've had this deal for years. Just recently I've been getting mails/emails/calls/texts offering to upgrade me to the same features for more money with guaranteed price rices built in.

Why would I believe either bunch of shysters when they make promises about their future behaviours? The only promises they'll keep are those the benefit their bottom line. You the victim, sorry valued customer, can spit into the wind. It'll be more rewarding!

[Roland6]

Re: We need to upgrade you.....

> Had SIM only deals from Three for years

Need to watch the network upgrade, my similar long standing Three 3G contracts are being terminated due to the 3G services being replaced by 4G/5G, although I can upgrade and receive new SIMs…

[Zakspade]

Hmm. After suffering the pain that is Vodafone, and jumping ship many years back - then finding myself with Three as they head toward the gutter in terms of customer service - I see that I will be transfering away as soon as my contract is up.

[Anonymous Coward]

My first mobile contract was with Hutchison Telecom, who used the Vodafone network. It eventually became cheaper to go direct to Vodafone, which I did (keeping the same number). If I'd stayed with HT I would probably have been moved onto their 3 network when they started it. But it looks like my move was merely pre-emptive...

[Anonymous Coward]

TL:DR

If you use a mobile phone you'll be screwed.

[abend0c4]

Incumbents' monopoly

while this might enable a new fourth operator to enter the UK market, it is not clear that any such business could compete effectively

If it's basically a market that's closed to new entrants, there's no real incentive for the incumbents to compete: the weakest won't be allowed to fail and reduce competition further and the strongest won't want to grow and risk being broken up because it's gained too much market share.

If it's not going to end up like the water industry, the network infrastructure needs to be run as a single public utility - though its provision and operation could be subcontracted.

[b166er]

If BT opposes it then I'm all for Throdafone

[TeeCee]

Oh bugger.

As usual, the authorities have completely missed the elephant in the room, in this case the MVNOs on 3.

So why do Vodafone want this to go through? Well, if you look at their model, you'll find that if you get a phone and plan on a long contract, it's a massive saving over buying the phone outright and taking one of their SIM only offerings. A great deal, right?

Wrong. The problem here is that their SIM only plans are outrageously overpriced when you look at the likes of ID mobile or SMARTY on 3. Now, it's quite difficult to draw price comparisons as they are really bloody good at obfuscating the deals by breaking out voice, data, roaming etc. However, I reckon if you were daft enough to take, say, an iPhone 16 on, say, a 48 month contract, you'd pay somewhere around double what you would by just buying the sodding thing outright at the lowest price and then chucking a tenner a month at one of the MVNOs. I guess the CEO's new Merc doesn't pay for itself every year.

Best bit of vodashit is their offering of unlimited data which I strongly suspect involves a very interesting interpretation of the word "unlimited". I'm forced to wonder if I'd actually be allowed to get more than my current 100Gb limit. I reckon this feature only exists to make price comparisons more difficult, although I also reckon that you catch a lot of sheep using "iPhone" and "unlimited" as bait.

[Martin an gof]

Re: Oh bugger.

"Unlimited" tariffs are a bit pointless for comparison - very few people actually need to use more than a few GB of mobile data a month what with all the WiFi floating about for free. Even my kids manage to keep well under 5GB a month, in fact most months they are under 2GB*.

Of course, if you are in the habit of attending work Teams meetings at the top of a hill, you'll need all the data you can get, but a bit of TV or radio or social media on the bus or train on the way to work? WiFi.

So the real question isn't "what does unlimited mean, and is it worth £<n> a month more than 30GB?", it's "which tariff is closest to my actual usage?"

To take my kids as an unrepresentative sample, why would I pay £20 a month for unlimited data (Smarty) when they have never (so far) used more than 5GB. I might as well pay £6 a month for 5GB (or £5.40 each for two with 10% off) and use the £14 saved for something else. In a year or so that saving could have paid for a reasonable refurbished phone from somewhere like Backmarket.

I can even leave some non-expiring credit in the account just in case they need to exceed the cap.

M.

*I know this because my entire family is on limited data tariffs of various descriptions (all under 5GB), and I can think of just four occasions in the last (say) three years where the limits have been exceeded, one of those quite recently when an important work meeting had to be attended at short notice, parked in a WiFi-devoid car park with work kit which has no data allowance at all. 3GB wasn't quite enough for the full 90 minutes of the meeting.

[Anonymous Coward]

For me as long as Vodafone keep offering their 'additional sim for £10/month' deal with good allowances I don't mind. I am used to the fact that every 18 months I go through the rigmarole of taking out 5 new lines with vodafone, porting our existing 5 numbers off to some free mvno and porting them back to the new lines.

Is a rigmarole but in return for it we get 5 lines on a good operator with healthy allowances for £50 a month. It would be nice for them to start offering these deals on existing lines but hey...

[Martin an gof]

I don't know whether the system has changed - I should bloomin' well hope it has or else it's all going to fall down sometime soon - but when number portability was first a "thing" I read an article that explained how it worked. Because the "original" number comes from a block allocated to a specific operator, the calling network first contacts them. The network which allocated the number replies with "no longer at this address, moved from here to $other_network" so the calling network goes off and asks the new network, which might in turn reply with "no longer at this address, moved from here to $another_network" and so on, almost ad-infinitum.

I suppose there is scope for trimming this procedure if the customer eventually ports back to a previous operator, but if not, it feels like a knotty problem that could one day clog up large parts of the telephone network.

Unless moving to all-IP means that telephone numbers become like URLs and there is a telephone equivalent of DNS... Oh...

M.

[Ruu]

Throdafone

Throdafone.

That's it, that's the comment.

[Ltd]

My thoughts;

I personally think it’ll be approved.

The fact that the CMA put conditions out there for both companies to adhere to, is a good indication they’re for the merger. And the conditions that the CMA put forward are things Three & Vodafone are 100% going to agree to.