Vodafone and Three to Create UK’s Largest Mobile Network Through Merger
The UK’s two remaining standalone mobile networks, Vodafone and Three, have revealed plans to merge, according to an announcement. This move comes in a market that has witnessed significant consolidations in recent years, including Virgin Media’s merger with O2 and BT Group’s acquisition of EE. If the deal is approved by regulators, the new company formed by Vodafone and Three will become the largest mobile phone operator in the UK, with an estimated 27 million customers.
“Three UK and Vodafone UK currently do not have the scale to earn their cost of capital. This has long been a challenge to Three UK’s ability to invest and compete,” Canning Fok, CEO of (Three Owner) CK Hutchinson Group, said in a statement. “Together we will have the scale needed to deliver a best-in-class 5G network to the UK, transforming mobile services for our customers and opening up new opportunities for businesses across the UK.” Vodafone owns 51 percent of the company, while CK Hutchinson controls the rest.
The merger with Vodafone isn’t the first time Three has tried to pair up with a rival. In 2015, its parent company announced plans to buy O2 for £10.25 billion ($12.96 billion), but the European Commission and the Competition and Markets Authority (CMA) blocked the purchase due to “reduced competition” and “high prices”. However, O2 was able to merge with Virgin Media in 2021 after the CMA found similar concerns unfounded. Vodafone and Three are trying to sweeten the latest deal with a pledge to invest 11 billion pounds ($13.9 billion) over 10 years in Britain’s 5G infrastructure, in line with government targets.
