UK (Parliament Politics Magazine) – Vodafone and Three UK merged in a £16.5bn deal, creating the UK’s biggest mobile network and pledging £1bn investment in coverage within a year.
As reported by The Guardian, Vodafone has formed a £16.5bn merger with Three UK and plans to invest over £1bn within the next year to enhance its mobile network across the country.
What VodafoneThree merger mean for the UK’s telecom industry?
The newly formed company, VodafoneThree, has pledged to invest £11bn in network expansion over the next ten years, following agreements with the UK competition regulator. On 2 June, the company announced that it would invest £1.3bn in capital projects during its initial year of operation.
The merger between Vodafone and Three UK, first announced in 2023, is set to be the most significant change in the British telecom industry in years, cutting the number of leading network operators from four to three, including BT/EE and Virgin Media O2.
The union of the UK’s third and fourth largest telecom operators will result in a network serving more than 27 million subscribers.
What did CMA warn about the Vodafone-Three merger and its conditions?
The Competition and Markets Authority initially warned that the merger could lead to increased costs for millions of customers, but it was approved last year. The green light came with a requirement for legally binding conditions.
The regulator has mandated that the new firm invest £11bn to upgrade its combined network. It must also maintain certain existing mobile tariffs and data plans for at least three years, including those on sub-brands. The regulator insisted that the firm promises to enhance its 5G network. It must also provide short-term protections to customers against rising prices.
What did Margherita Della Valle say about the merger’s impact?
Margherita Della Valle, Vodafone’s chief executive, described the merger as a game-changer that will create a powerful new player in UK mobile and revolutionize the country’s digital infrastructure.
She added, “We are now eager to kick off our network build and rapidly bring customers greater coverage and superior network quality. The transaction completes the reshaping of Vodafone in Europe, and following this period of transition we are now well-positioned for growth ahead.”
Della Valle took over as CEO in 2023, focusing on turning around the FTSE 100 giant.
She has successfully closed three significant deals within the regulated telecom market in less than two years. The VodafoneThree merger is her latest move, following the sale of Vodafone’s businesses in Spain and Italy.
What did VodafoneThree say about its new network tech and ownership?
VodafoneThree stated that its capital expenditure in the first year will focus on introducing technology for “multi-operator core network functionality.” This feature allows customers to access the network of the other operator.
The newly formed company is majority owned by Vodafone Group with 51%, while CK Hutchison, the former sole owner of Three UK, holds 49%.
What did Canning Fok say about the Vodafone-Three merger’s impact on investment?
Canning Fok, deputy chairman of Three UK owner CK Hutchison, and executive chairman of CKHGT stated, “Scale enables the significant investment needed to deliver the world-beating mobile networks our customers expect, and the Vodafone and Three merger provides that scale.”
key statistics about Vodafone UK
Customer base
- Mobile subscribers: 18.175 million (down by 125K in Q4 FY25)
- Pay monthly: Increased by 41K in Q4.
- Prepaid/PAYG: Lost 166K in Q4
- Broadband customers: 1.61 million (added 61K in Q4, slower growth vs. Q3)
- Full Fibre (FTTP) coverage: Reaches 19.4 million UK households (up from 18.4M last quarter)
Financial performance
- Q3 FY25 revenue: €1.865 billion (7.2% YoY growth, driven by service revenue and GBP strength)
- Service revenue growth: 3.3% YoY (boosted by broadband and consumer segments)
- Q4 UK service revenue: €1.489 billion (down from €1.507B in Q3)
5G and network investments
- Merger with Three UK: Completed in June 2025, creating VodafoneThree with 27M+ subscribers
- Investment commitment: £11B over 10 years, including £1.3B in 2025 for 5G rollout
- Coverage goal: Aim to become the UK’s largest 5G network
Pricing changes
- April 2025 price hikes:
- Mobile/broadband plans increased by CPI (2.5%) + 3.9% = 6.4% for most customers
- Business broadband rates rose by RPI (3.5%) or CPI+3.9% depending on the contract date