Vodafone and Three owners have signed a deal that will see their British telecommunications networks merge to create the largest mobile phone operator in the UK. Vodafone and Three are among the biggest mobile phone operators in the UK, ranking third and fourth respectively.
When the deal goes through, the newly created telecom company will have over 27 million subscribers. However, the regulators are yet to clear the deal, as they are set to look into whether the deal will increase customer prices.
Three and Vodafone merger will push their combined market share above Virgin Media O2’s. Virgin Media O2 boasts over 24 million customers while BT Group-owned EE has about 20 million users. As such, the newly merged company will surpass the two leading companies in the number of users if the Competition and Markets Authority (CMA) gives the go-ahead.
Previously, the competition regulator had argued that having only three networks in the country could harm the consumer. In 2016, the regulator (CMA) and the European Commission stopped Three’s attempt to acquire O2, arguing the move risks an increase in prices in the market.
This time, the government is likely to scrutinize the deal under the 2012 National Security and Investment Act. The act allows ministers to stop all transactions that are linked with key national assets if they’re deemed to negatively impact national security. That’s mainly because Vodafone UK has several contracts with the government. The strong security measures have also impressed gaming enthusiasts as it allows them to access platforms like https://www.topmobilecasino.co.uk/deposit-methods/pay-by-phone-casino/ without the risk of losing their information.
Vodafone has been heavily criticized this year for implementing above-inflation price increases and they announced last month they’ll be cutting 11,000 jobs in the next three years. However, this deal is expected to give the telecom company deep ties to the Chinese market and a more prominent position in the UK telecommunication infrastructure.
The two telecom companies might look to sweeten the deal if they get the regulator’s approval by emulating the offer made by O2 and Three as part of their failed deal to merge. This will involve freezing their prices for the next five years. However, their rivals are highly likely to lobby for the new entity to surrender some of its 5G mobile spectrum and allow rivals like TalkTalk, Sky, and other brands that don’t own their own infrastructure into the network.
According to Vodafone’s group chief executive Margherita Della Valle, the merger of Vodafone and Three will be great for their customers, for the competition, and for the country at large. The talk for the merger has been underway since autumn and Vodafone is expected to take control of 51% of the new company, while CK Hutchison takes 49%.
Under the agreed plans, the company has pledged to invest 11 billion euros in the UK over the next decade. Vodafone also has the option to acquire CK Hutchison’s stake in the company three years after completing the deal. That’s expected to be by the end of 2024.
