Vodafone and the owner of Three have joined forces in a merger deal they say is aimed at creating one of Europe’s largest 5G networks.
The firms, which have millions of customers in the UK, announced the multibillion-pound deal on Wednesday, with Vodafone owning the majority of the business on 51 per cent equity.
Hong Kong-headquartered CK Hutchison will own the remaining 49 per cent, creating the biggest mobile phone network in the UK, worth a reported £15bn.
The groups said the tie-up will help them compete with their rivals in the roll-out of 5G, with the new company set to reach more than 99 per cent of the UK population with their 5G standalone network.
A workers’ union called on the government to block the deal, saying it would give a company “with deep ties to the Chinese state” an “even more prominent place” in the UK’s telecommunications infrastructure
The firms are expected to have a combined 27 million customers if the deal gets the go ahead. Margherita Della Valle, chief executive of Vodafone, called the deal a "gamechanger".
She said: "The merger is great for customers, great for the country and great for competition.
"It’s transformative as it will create a best-in-class - indeed best-in-Europe - 5G network, offering customers a superior experience.
"As a country, the UK will benefit from the creation of a sustainable, strongly competitive third scaled operator - with a clear £11 billion network investment plan - driving growth, employment and innovation.
"For Vodafone, this transaction is a gamechanger in our home market. This is a vote of confidence in the UK and its ambitions to be a centre for future technology."
Canning Fok, group co-managing director of CK Hutchison, said: "Today’s announcement is a major milestone for CK Hutchison and for the UK.
"Three UK and Vodafone UK currently lack the necessary scale on their own to earn their cost of capital.
"This has long been a challenge for Three UK’s ability to invest and compete.
"Together, we will have the scale needed to deliver a best-in-class 5G network for the UK, transforming mobile services for our customers and opening up new opportunities for businesses across the length and breadth of the UK."
Gail Cartmail, executive head of operations for Unite said: “This deal will give a company with deep ties to the Chinese state an even more prominent place at the heart of the UK’s telecommunications infrastructure.
“On top of that, it will hike people’s bills and mean job losses for Vodafone and Three workers.
“The government must step in and stop this reckless merger and Unite is building a cross-party coalition to demand they do so.”
