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| Vodafone Three deal to create UK's largest mobile firm | |
| (32 minutes later) | |
| A deal to create the UK's biggest mobile phone operator has been struck by Vodafone and the owner of Three UK. | A deal to create the UK's biggest mobile phone operator has been struck by Vodafone and the owner of Three UK. |
| The firms plan to merge their UK-based operations, giving them around 27 million customers and making it the biggest mobile network in the UK. | The firms plan to merge their UK-based operations, giving them around 27 million customers and making it the biggest mobile network in the UK. |
| The deal it yet to be approved by regulators, which will look at whether it will push up customer prices. | The deal it yet to be approved by regulators, which will look at whether it will push up customer prices. |
| The Vodafone and Three merger will take their combined market share past Virgin Media O2. | The Vodafone and Three merger will take their combined market share past Virgin Media O2. |
| Virgin Media O2 has around 24 million customers while EE, which is owned by BT Group, has 20 million mobile users. | Virgin Media O2 has around 24 million customers while EE, which is owned by BT Group, has 20 million mobile users. |
| Vodafone and Three UK are the country's third and fourth largest mobile firms. The Competition and Markets Authority (CMA) confirmed that it will examine the combination. | Vodafone and Three UK are the country's third and fourth largest mobile firms. The Competition and Markets Authority (CMA) confirmed that it will examine the combination. |
| The competition watchdog said: "Both Vodafone and Three are key players in the UK communications market - with millions of consumers and many businesses relying on their services - so it's right that the CMA reviews the impact this deal could have on competition." | The competition watchdog said: "Both Vodafone and Three are key players in the UK communications market - with millions of consumers and many businesses relying on their services - so it's right that the CMA reviews the impact this deal could have on competition." |
| Customer effects? | |
| Vodafone will own 51% of the new business while Three UK-owner CK Hutchison will control the remaining stake. | Vodafone will own 51% of the new business while Three UK-owner CK Hutchison will control the remaining stake. |
| Vodafone and Three claimed customers "will enjoy a better network experience with greater coverage and reliability at no extra cost" from day one. | Vodafone and Three claimed customers "will enjoy a better network experience with greater coverage and reliability at no extra cost" from day one. |
| They also said they would invest £11bn in the next generation of telecoms technology - 5G - in the UK over 10 years. | They also said they would invest £11bn in the next generation of telecoms technology - 5G - in the UK over 10 years. |
| Karen Egan, head on mobile at Enders Analysis, said the companies were "certainly making a strong case for merger approval". | Karen Egan, head on mobile at Enders Analysis, said the companies were "certainly making a strong case for merger approval". |
| However, getting there "is going to be a long and tortuous road", she said and could take up to 18 months. | However, getting there "is going to be a long and tortuous road", she said and could take up to 18 months. |
| Ms Egan added that the "CMA's hawkish approach to mergers of late is not encouraging", after the competition watchdog blocked UK approval for Microsoft's proposed $69bn takeover of Call of Duty-owner Activision Blizzard. | Ms Egan added that the "CMA's hawkish approach to mergers of late is not encouraging", after the competition watchdog blocked UK approval for Microsoft's proposed $69bn takeover of Call of Duty-owner Activision Blizzard. |
| In 2016, EU regulators blocked a takeover of O2 by the owner of Three, saying it would reduce customer choice and raise prices. This was after the CMA had also expressed "serious concerns" about that deal. | |
| Job cuts warning | |
| In May, the new chief executive for Vodafone Margherita Della Valle set out her plans for the firm, saying its "performance has not been good enough". | |
| Part of the plans include cutting 11,000 jobs over three years, which is equal to around a tenth of its workforce. | |
| In addition, Vodafone and Three hinted at extra job cuts within five years of the deal going through due to the consolidation of IT, marketing, sales, distribution and logistics operations. | |
| The Unite union said the deal was "reckless", and that it would "hike people's bills and mean job losses for Vodafone and Three workers". | |
| The merger between the two companies has been long-expected after talks on the deal started in October last year. | |
| Related Topics | Related Topics |
| Companies | Companies |
| Telecommunication | Telecommunication |
| Mobile phones | Mobile phones |
| Vodafone | Vodafone |