Newbury-based Vodafone agrees merger with Reading-based mobile network rival Three UK

By Peter Davison

14 June 2023

Share

The Business Magazine article image for: Newbury-based Vodafone agrees merger with Reading-based mobile network rival Three UK

Vodafone UK’s Newbury headquarters

Newbury-based Vodafone has agreed to merge with Reading-based mobile network rival Three UK, creating one of Europe's largest 5G networks.

Announcing the merger today (Wednesday) the parties said they would invest £11bn in the UK over ten years to create one of Europe's "most advanced standalone 5G networks".

The merger would yield up to £5 billion per year in economic benefit by 2030, create jobs and support digital transformation of the UK's businesses, they said.

Every school and hospital in the UK will have access to standalone 5G by 2030.

The combined group will be majority-owned by Vodafone at 51 per cent.

The firms anticipate cost savings of £700 million.

Margherita Della Valle, Vodafone Group chief executive, said: "The merger is great for customers, great for the country and great for competition.

"It's transformative as it will create a best-in-class - indeed best in Europe - 5G network, offering customers a superior experience.

"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."

Canning Fok, group co-managing director of Three UK owner CK Hutchison, said: "Today's announcement is a major milestone for CK Hutchison and for the UK.

"Three UK and Vodafone UK currently lack the necessary scale on their own to earn their cost of capital.

"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.

"This will unlock significant value for CK Hutchison and its shareholders, realise material synergies, reduce net financial indebtedness and further strengthen its financial profile."

The merger is subject to regulatory and shareholder approvals.

By Peter Davison

Peter Davison is deputy editor of The Business Magazine. He has spent his life in journalism – doing work experience in newsrooms in and around Bristol while still at school, and landing his first job on a local newspaper aged 19. By 28 he was the youngest newspaper editor in the country.

An early advocate of online news, he spent the first years of the 2000s telling his bosses that the internet posed both the biggest opportunity and greatest threat to the newspaper industry and the art of journalism. He was right on both counts.

Since 2006 he has enjoyed a career as a freelance journalist. He lives in rural Wiltshire with one wife, two children, and three cats.