To become the UK’s top telecom, both Vodafone UK and Three UK are merging their assets to become a new entity – led by Vodafone with 51% and the rest by Three.
The new entity will have a combined user base of 27 million subscribers, putting it ahead of Virgin Media O2 and BT’s EE. Well, the new deal is supposed to go through UK’s market regulator before working as a combined entity.
Merging Vodafone and Three Telecoms
As Bloomberg reported last year, Vodafone UK and Three UK are merging to become significant entity by the end of 2024. This move was announced today to become the country’s largest telecom operator, surpassing the existing giants of Virgin Media O2 and EE.
The new entity will have a combined subscriber base of 27 million users, pushing the current top 2 telecoms to second and third places. For instance, BT-led EE had over 20 million users, while Telefonica and Liberty Global-led Virgin Media O2 had over 24 million users.
Vodafone’s CEO Ahmed Essam will lead the combined entity of Vodafone UK and Three UK, while Three UK’s CFO Darren Purkis will reign as the new CFO. Regarding the overall stake, Vodafone UK controls 51% of the new entity while leaving the rest to Three UK.
The merger deal is expected to close by the end of 2024, with some job cuts and internal reorganizations. Well, the biggest hurdle is passing before the Competition and Markets Authority (CMA) – UK’s competition regulator.
With new provisions and amendments, the UK’s CMA has recently become increasingly influential. The CMA has recently blocked the deal of Microsoft acquiring Activision but later allowed it on specific grounds.
Thus, to sweeten the regulator, the new entity may invest £11 billion ($13.91 billion) in the U.K. over ten years to create Europe’s most advanced standalone 5G networks – as asked by the government earlier.