Vodafone Group and CK Hutchison Holdings’ Three announced on Wednesday (3 July) that they will be selling a portion of their spectrum to Virgin Media O2 (VMO2) if a merger between the two companies is approved by the UK competition watchdog. 

The $16.4bn Vodafone-Three merger is currently undergoing investigation by the UK Competition and Markets Authority (CMA). If the deal is approved it would create the largest mobile operator in the country. 

The CMA raised concerns that the combined allocation of spectrum could reduce competition in the market and lead to higher prices for consumers.

Spectrum relates to the waves of electromagnetic frequencies that are used by telecom companies to provide a variety of services.

Vodafone and Three’s proposed sale of a portion of their spectrum is a response to the CMA’s concerns. The sale would create a more equal balance between the leading UK operators, Vodafone and VMO2 said in a joint statement. 

The CMA also raised concerns that the deal could negatively impact smaller mobile networks such as Sky Mobile and Lyca Mobile.

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If the merger is approved, Vodafone and VMO2 also announced that they would extend their decade-long existing network-sharing agreement to bring Three on board.

“This new agreement with Vodafone ensures that quality mobile network choice, performance, coverage, and competition is enhanced to the benefit of millions of consumers, businesses, and our mobile operator partners across the country,” Lutz Schüler, CEO of VMO2 said.

“We are extending and bolstering elements of our existing network sharing arrangement, while also ensuring there is a robust, balanced, and functional structure in place for the long-term should Vodafone and Three’s proposed merger gain consent,” he added.