Vodafone Pledges £1bn Investment in UK Network Coverage Following Three UK Merger
Vodafone has announced plans to invest over £1bn in expanding its network coverage in the UK over the next year, as it completes a £16.5bn merger with Three UK. The new company, VodafoneThree, will invest £11bn in its coverage over the next decade, in line with commitments agreed with the UK’s Competition and Markets Authority (CMA) last year.
According to a report by The Guardian, the merger between Vodafone’s domestic business and Three UK, which was first announced in 2023, represents the biggest shake-up in years in the British telecoms industry. The deal reduces the four main network operators to just three, alongside BT/EE and Virgin Media O2. The combined network will have more than 27 million subscribers.
The CMA initially expressed concerns that the merger could lead to higher bills for millions of customers. However, it gave the deal the green light last year, subject to a set of legally binding commitments. These include a requirement for the new company to spend £11bn on upgrading its combined network and commit to retaining certain existing mobile tariffs and data plans for at least three years, including on sub-brands.
As The Guardian notes, the regulator also dictated that the company must promise to upgrade 5G coverage and offer short-term customer protections against price rises. VodafoneThree said the first year of its capital expenditure project would involve bringing in technology to enable "multi operator core network (MOCN) functionality", which allows customers to access the other operator’s network.
The Unite union had warned that the merger could lead to up to 1,600 job losses. However, Vodafone has rejected the figure, and said the deal would ultimately lead to more jobs being created. Margherita Della Valle, the Vodafone chief executive, said the merger would create a "new force in UK mobile" and "transform the country’s digital infrastructure".
"We are now eager to kick off our network build and rapidly bring customers greater coverage and superior network quality," Della Valle added. "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, who became chief executive in 2023, has been tasked with reviving the fortunes of the FTSE 100 company.
The Vodafone group owns 51% of the new company, while Three UK’s previously sole owner CK Hutchison owns 49%. As reported by The Guardian, the merger follows the sale of two struggling businesses in Spain and Italy. The deal is seen as a significant step in the UK’s telecoms industry, and VodafoneThree is expected to play a major role in shaping the country’s digital future.
The company’s investment plans have been welcomed by industry analysts, who see the merger as a positive development for the UK’s telecoms sector. "This merger is a game-changer for the UK’s telecoms industry," said a spokesperson for The Guardian. "It will create a new force in UK mobile and transform the country’s digital infrastructure."
The merger has also been subject to scrutiny from regulatory bodies, with the CMA closely monitoring the deal’s impact on the market. According to The Guardian, the CMA’s investigation into the merger found that it could lead to higher prices and reduced competition in the market. However, the regulator ultimately approved the deal, subject to certain conditions.
In response to the merger, the UK’s telecoms industry is expected to undergo significant changes. VodafoneThree will be required to meet certain conditions, including investing in network upgrades and protecting customer tariffs. The company’s plans for the future have been welcomed by industry analysts, who see the merger as a positive development for the UK’s telecoms sector.
The investment plans announced by Vodafone are seen as a significant step in the company’s efforts to revamp its network and improve its services. The company’s commitment to investing £11bn in its coverage over the next decade is a major pledge, and one that is expected to have a significant impact on the UK’s telecoms industry. As The Guardian notes, the merger is a major development in the UK’s telecoms sector, and one that is expected to shape the country’s digital future.
Source: www.theguardian.com
