Vodafone enters merger with Three UK
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Editor
| 15 June 2023
Having long argued for the need for consolidation in the UK communications market, operators Three UK and Vodafone have at last executed on their ambition to combine businesses in order to compete more effectively in the UK comms market.
Vodafone 5g video 15Sep2021
The assets and equity of the combined company, which will initially operate under the name of MergeCo, wil be split 51/49 between parents Vodafone Group and Three UK owner CK Hutchison Group Telecom Holdings. Vodafone UK CEO Ahmed Essam will become MergeCo CEO with current Three UK CFO Darren Purkis as CFO.

The merger will create a third large scale UK operator increasing competition for the UK’s two leading converged operators EE and Virgin Media O2. The combined network will also reach more than 99% of the UK population with a 5G standalone network that will, says the two parents, deliver to customers up to a six-fold increase in average data speeds by 2034. The combined business will also offer fixed wireless access to 82% of households by 2030, complementing MergeCo’s access to what they say will be the UK’s biggest full-fibre footprint.

“Three UK and Vodafone UK currently lack the necessary scale on their own to earn their cost of capital,” commented K Hutchison group co-managing director Canning Fok. “This has long been a challenge for Three UK’s ability to invest and compete. Together, we will have the scale needed to deliver a best-in-class 5G network for the UK, transforming mobile services for our customers and opening up new opportunities for businesses across the length and breadth of the UK.”

“[The merger] is transformative as it will create a best-in-class – indeed best in Europe – 5G network, offering customers a superior experience,” added Vodafone Group chief executive Margherita Della Valle. “As a country, the UK will benefit from the creation of a sustainable, strongly competitive third scaled operator – with a clear £11 billion network investment plan – driving growth, employment and innovation. For Vodafone, this transaction is a game changer in our home market. This is a vote of confidence in the UK and its ambitions to be a centre for future technology.”

The deal is expected to close before the end of 2024 subject to regulatory and shareholder approvals.