The Vodafone telecommunications company chief executive stressed that its recent merger with rival Three would not equate to higher consumer prices.
About Vodafone and Three
Vodafone is a leading technology company based in Europe and Africa. They are the largest fixed and mobile network operator in Europe, as well as the biggest and fastest growing 5G network in the continent. Vodafone has fixed networks in 21 countries and mobile networks in 48 more countries. The company is also a leader in Fintech and mobile payments in Africa.
Three launched in 2003 as the first 3G only network in the UK. Three is the fastest 5G network in the UK, with a 4G network that covers 99% of the UK. The merger with Three and Vodafone marks a major milestone in digital infrastructure.
The Aftermath
The merger will create the United Kingdom’s largest mobile network, encompassing 27 million customers. The deal gained approval contingent upon the parties to this corporate marriage agreeing to invest billions in the nation’s 5G network and limit specific mobile tariffs for the next three years.
Vodafone’s leader, Margherita Della Valle, recently spoke on the BBC 4 program Today. She said the merger is self-funded, meaning its completion will unfold upon receiving additional public money, not manifesting in increased costs for existing customers.
The CMA Responds
The regulatory agency, the Competition and Markets Authority (CMA), initially expressed reservations, believing that this major merger could heighten monthly
charges levied to customers.
Stuart McIntosh, the overseer of the CMA’s merger examination, said that the entity has concluded the action will likely increase competition in the mobile market and should be permitted to proceed.
Furthermore, the CMA said the merger’s participants are subject to a legally binding mandate to invest in network infrastructure improvement projects over the next eight years.
Moreover, selected mobile tariffs and data plans would be capped for three years to safeguard subscribers from price hikes. However, the CMA still needs to disclose which plans are included. That said, such information is expected to be included in a report that will soon be released.
An Important Event
Regulators will watch the deal play out with keen interest. The increased cost associated with mobile phone contracts and other digital services, as has the slow integration of the 5G network into the nation’s telecommunications arena.
Kester Mann, an analyst for the London-based technology and research advisory company CCS Insight, calls the merger one of the most significant moments in the history of UK mobile. He added that the agreement seemed to strike the proper balance between nurturing competition and encouraging investment.
Pablo Pescatore, a tech industry analyst, told BBC News that the merger’s impact has been difficult to fully interpret for some time.
“The bottom line is that it will take many years before the full merits of the deal are realized,” he said.
Pescatore said that both parties must deliver on their promises for the deal to yield the greatest possible benefits.
Previous Tech Mergers
The Vodafone-Three conjoining is only one example of UK mobile market marriages. In 2010, Orange and T-Mobile created EE, which BT consumed in 2016. In 2021, the CMA okayed a merger between O2 and Virgin Media.
Job cuts followed some of the preceding agreements. EE eliminated 1,200 positions just months after the action and another 550 the following year.
Vodafone and Three claim that joining forces will create thousands of new jobs. That said, the union Unite cautioned that this deal may significantly increase monthly charges for customers and lead to as many as 1,600 lost jobs.
