The third and fourth largest UK operators by market share today announced plans to merge. We are talking about Vodafone and Tre. The combined company would outsell both EE (the current number 1) and O2 (the number 2), creating the largest operator in the country while at the same time lowering competition, as where there were four, there will only be three.
As part of the proposed deal, Vodafone will own 51% of the combined business and CK Hutchinson Group Telecom Holdings (the owner of the Three brand) will own 49%.
Of course, as usual in such situations wonderful things are promised for the customers so as to make everyone forget how there will be literally less competition in the market if such a deal goes through. “Millions of Vodafone UK and Three UK customers will enjoy an improved network experience with greater coverage and reliability at no extra cost, including through some flexible, contract-free offers without annual price increases and social tariffs,” the joint press release reads. . States.
The combined business is tentatively named MergeCo (so imaginative!), and this will presumably reach 99% of the UK population with its autonomous 5G network, “giving customers up to a sixfold increase in average data speeds by 2034”.
MergeCo to invest £11bn in UK over ten years and having “best-in-class 5G network in place first” (compared to what? is not mentioned), “the merger will deliver up to £5 billion a year in economic benefits by 2030”, whatever that means. Every school and hospital in the UK is promised to have access to autonomous 5G by 2030, for what it’s worth.
Also by 2030, MergeCo will offer fixed wireless access to 82% of households. Current Vodafone UK CEO Ahmed Essam will become CEO of MergeCo and current Three UK CFO Darren Purkis will assume the role of MergeCo CFO.
The transaction is expected to close by the end of next year, pending regulatory and shareholder approvals, the former of which could drag things significantly.
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