Vodafone to join with Three to create UK mobile giant

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 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.

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 and the combination will draw scrutiny from the Competition and Markets Authority (CMA).

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.

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”.

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.