{"id":30996,"date":"2022-05-12T14:46:06","date_gmt":"2022-05-12T13:46:06","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=30996"},"modified":"2022-05-12T14:46:06","modified_gmt":"2022-05-12T13:46:06","slug":"vodafone-and-three-uk-reportedly-open-merger-talks","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2022\/05\/vodafone-and-three-uk-reportedly-open-merger-talks.html","title":{"rendered":"Vodafone and Three UK Reportedly Open Merger Talks"},"content":{"rendered":"

Unconfirmed reports claim that mobile operators Vodafone<\/a> and Three UK<\/a> (CK Hutchison Holdings) have opened early stage talks with a view to reaching an agreement over a possible merger \/ joint venture of their two businesses in the UK, which would reduce the number of primary network operators from four to three.<\/p>\n

The report, which is said by the FT<\/a> (paywall) to have emanated from sources with direct knowledge of the matter, wouldn’t come as much of a surprise, if true, because the pair have often appeared to flirt with the idea of a merger – most recently at the start of this year (here<\/a>).<\/p>\n

After the previous mergers between BT<\/a> and EE<\/a>, as well as O2<\/a> and Virgin Media<\/a>, it becomes somewhat easier to understand why Vodafone<\/a> and Three UK<\/a> might be seeking a bit more security together. Other markets around the world have also recently seen a reduction in primary mobile operators from four to three (e.g. Ireland).<\/p>\n

In the past, Ofcom<\/a> has tended to object to big mobile-only mergers, which is partly because they wanted to protect consumer and wholesale (MVNO) competition in the market. But a 2020 ruling by the European Court of Justice<\/strong> (here<\/a>) made it harder to adopt that position, although the regulator is no longer beholden to such rulings post-Brexit but is still believed to have softened their stance (we won’t know for sure until they’re tested).<\/p>\n

Nevertheless, the benefits of such a merger aren\u2019t quite as clear as they were in the case of BT<\/a> and EE<\/a> or O2<\/a> and Virgin Media<\/a>, which predominantly reflected a tie-up between fixed line and mobile centric businesses. By comparison, Three UK<\/a> doesn\u2019t have a fixed line business and Vodafone<\/a>\u2019s fixed line base largely reflects their partnerships with other networks, such as Openreach<\/a> and CityFibre<\/a> (they’ve also got some fibre of their own).<\/p>\n

In short, we can\u2019t see as many benefits for consumers stemming from such a merger (the internal business is another matter), but that would depend upon the detail of such a deal and how much spectrum they were allowed to retain (regulators may require that some spectrum be redistributed to rivals). The markets\u2019 many virtual operators (MVNO) may also have some big concerns.<\/p>\n

Kester Mann, Director, Consumer and Connectivity at CCS Insight, said:<\/strong><\/p>\n

“Confirmation of talks between Vodafone and Three in the UK would come as no surprise. Three has talked up consolidation for years; Vodafone is under shareholder pressure to strike deals. Both need greater scale to compete with BT<\/a> and Virgin Media<\/a> O2<\/a> in the competitive UK market.<\/p>\n

A few years ago, a tie-up between Vodafone and Three would have felt like a unnatural pairing. But in recent times, Vodafone has taken on more of a challenger role, notably evidenced by its launch of speed-tiered unlimited data tariffs. Three\u2019s traditional focus is on market disruption and providing value for money, so their cultures may not now be too far apart. Additionally, the two companies have joined forces before, having merged operations in Australia a few years ago.<\/p>\n

Regulation would prove a significant hurdle to any deal. This is because it would instantly create a new market leader based on mobile customers and own a vast trove of 5G<\/a> spectrum. Some concessions would almost certainly be necessary.”<\/p><\/blockquote>\n

One other issue, which is much harder to skirt around, is the fact that Three UK is more of a low-cost brand, while Vodafone tends to position itself as a premium service. This would make it difficult to turn one business into a single merged company, so some degree of compromise may be required.<\/p>\n

Lest we forget that there may also be other complications, given that Vodafone has a network sharing agreement with O2, while Three UK has something similar with EE<\/a>. At the time of writing, neither Vodafone nor Three UK have commented on the latest reports.<\/p>\n","protected":false},"excerpt":{"rendered":"

Unconfirmed reports claim that mobile operators Vodafone and Three UK (CK Hutchison Holdings) have opened early stage talks with a view to reaching an agreement over a possible merger \/ joint venture of their two businesses in the UK, which would reduce the number of primary network operators from four to three.<\/p>\n","protected":false},"author":1,"featured_media":23201,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[472,63,96],"class_list":["post-30996","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-business","tag-three-uk","tag-vodafone"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nVodafone and Three UK Reportedly Open Merger Talks - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Unconfirmed reports claim that mobile operators Vodafone and Three UK (CK Hutchison Holdings) have opened early stage talks with a view to reaching an\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2022\/05\/vodafone-and-three-uk-reportedly-open-merger-talks.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Vodafone and Three UK Reportedly Open Merger Talks - 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