In a statement to shareholders, Vodafone said that a deal with Three UK owners CK Hutchison would “create a new major player in the UK mobile market”.
Referring to a recent report by telecoms regulator Ofcom on the competitiveness of the 5G market in the UK, Vodafone said the deal would help ensure both companies had ”the necessary scale to earn their cost of capital.”
It added: “The merged business would challenge the two already consolidated players for all UK customers and bring benefits through competitively priced access to a third reliable, high quality and secure 5G network throughout the UK.”
Mobile network performance measurement firm RootMetrics recently revealed that UK mobile network operators are delivering “outstanding 5G reliability with low latency”.
BT-owned EE came out on top for all of RootMetrics' 2022 report’ showing UK-wide RootScore categories which measured: ‘Reliability’, ‘Accessibility’, ‘Speed’, ‘Data’, ‘Call’, and ‘Text’ and has established itself as the market leader. They are now being challenged most closely by the UK’s largest telecoms company following the full completion of a £31bn merger to create Virgin Media O2 in June 2021.
A merger between Vodafone and Three would establish the new company as a third MNO of similar scale. Vodafone concluded the statement by saying: “The conditions to ensure thriving competition in the market need to be nurtured, otherwise the UK is at risk of losing the opportunity to be a 5G leader.”
Vodafone would reportedly own 51% of the new business, and Three’s Hong Kong-based owner CK Hutchison would take 49%. The merged business would start with an estimated customer base of 27 million mobile users.
