UK deepens competition probe into Vodafone-Three deal

The Competition and Markets Authority (CMA), which began in January a formal investigation into the tie-up, said in a statement that it will launch an in-depth probe after both firms declined to offer undertakings to ease its concerns. 

The watchdog had warned last month that the deal could have a "substantial" impact on competition and may lead to higher prices and also reduced quality for consumers. It had given the groups until April 2 to respond. 

"The CMA has referred the anticipated joint venture... for an in-depth investigation," it said in a statement on Thursday. 

"On the information currently available to it, it is or may be the case that this merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom." 

Vodafone said in response that the move was "an expected next step in the process" and expressed confidence it would complete the transaction, while insisting there would be no price changes. 

"Vodafone UK and Three UK remain confident that the transaction will drive stronger competition in the mobile sector and give customers and businesses a step-change in network quality, speed, and coverage," Vodafone said in a statement e-mailed to AFP. "Both companies have already stated there will be no change to each operator's pricing strategy as a result of the merger." 

The proposed tie-up, announced in June last year, is aimed at creating Britain's biggest mobile operator with 27 million customers and to accelerate rollout of faster 5G connectivity. The planned transaction sees British giant Vodafone taking 51 percent of the combined group and CK Hutchison the rest. 

The pair have a target value of £16.5 billion ($21 billion) for the new group. 

The merger, if approved, will vault the combined operations above the country's two largest mobile operators BT EE and Virgin Media O2 in terms of customer numbers. 

Expansion of 5G across the UK has been hampered by Britain's ban on Chinese giant Huawei, a major supplier of equipment for mobile telephone networks.