Vodafone and Three’s owner have reached an agreement to merge their British telecoms networks, resulting in the creation of the UK’s biggest mobile phone operator.
The merger of the UK’s third- and fourth-largest operators would result in a combined company with over 27 million subscribers, surpassing EE and Virgin Media O2.
The proposed deal is expected to undergo careful examination by competition regulators. Ofcom, the UK telecom regulator, altered its previous position last year, expressing greater receptiveness to consolidation in the industry. Previously, Ofcom maintained that reducing the number of networks to three within a country could potentially negatively impact consumers.
Related: Vodafone, Hutchison Set To Announce UK Merger
The Guardian reported that in 2016, the CMA and the European Commission blocked Three’s takeover of O2 due to the risk of increased prices.
The government may review the deal under the National Security and Investment Act 2021, which grants the authority to prevent transactions that could harm national security. Vodafone UK’s government contracts make it a potential candidate for scrutiny.
Unite has expressed concerns about the proposed deal due to foreign joint ownership of a key national asset, as well as potential job cuts and price increases.
Vodafone recently announced its plan to reduce its workforce by 11,000 over the next three years, despite receiving criticism for implementing price increases above inflation for consumers.
