- Vodafone and Three have finally finished their mega mobile merger
- Vodafone has said it will invest $14.9 billion over the next 10 years on the venture
- The operator is expecting cost and capex reductions from the merger
Vodafone and Three have completed their $20.28 billion (£15 billion) merger, leaving the largest mobile operator in the UK with approximately 27 million users. Known as VodafoneThree, the new company will be led by CEO Max Taylor, who currently leads Vodafone UK.
VodafoneThree has said it will invest $14.86 billion (£11 billion) over the next 10 years, to create one of Europe’s most advanced 5G networks, giving millions of customers and businesses up and down the country a vastly improved mobile experience. VodafoneThree plans to invest $1.76 billion (£1.3 billion) in capex on its network during its first year. This will enable the company to accelerate network deployment.
“The merger will create a new force in UK mobile, transform the country’s digital infrastructure and propel the UK to the forefront of European connectivity,” claimed the Vodafone Group CEO Margherita Della Valle, following the completion of the merger, which was originally announced in June 2023.
“While most merging parties would probably lament the time it takes to get such a deal through (just two weeks shy of 2 years in this case), here a lengthy review period probably worked in Vodafone and Three’s favour,” said Matthew Howett, CEO of Assembly Research on LinkedIn. “During that time a new government was elected with a mission for investment-led growth, there was a realization that mobile coverage in the UK isn’t where it ought to be, and the CMA [Competition and Markets Authority] became more amenable to behavioural remedies. The result was a commitment to spend £11 billion... to build a new, enhanced 5G network. This investment will focus on improving network quality, reliability, and capacity, aiming to serve 99% of the UK population.”
We don’t know yet what changes, be it job cuts or other modifications, will happen due to the merger. Other major amalgamations — such as the T-Mobile and Sprint merger in the United States — supposedly led to job cuts at the combined organization.
Vodafone said that the combined business is expected to deliver cost and capex synergies of £700 million per year by the fifth year after completion. The transaction is expected to be accretive to Vodafone’s Adjusted free cash flow from FY29 onwards.
We’ll have to see if that translates into job cuts for the new venture.