Vodafone is on the cusp of submitting a proposal to the regulator for its blockbuster merger with Three, its boss said today as the telecoms giant brought in a new CFO.
Chief executive Margherita Della Valle, who unveiled the £15 billion deal last month, said she had “started engaging” with the Competition and Markets Authority, adding: “We expect to file our draft merger notice in the next few weeks.”
The deal is set to be completed in the second half of next year and would make the combined company the biggest mobile operator in the UK. But the proposal is likely to face intense regulatory scrutiny after a previous deal between O2 and Three was blocked by the European Commission, a decision supported by the CMA.
Della Valle promised the merger would lead to thousands of new roles being created but said of the scale of potential job cuts ahead that it was “far too early for these calculations.”
It comes as Vodafone today said it would be getting a new CFO, Luka Mucic, who will join in September. Mucic is currently finance director of German software multinational SAP. He replaces Della Valle, who has transitioned to the role of CEO following the departure of Nick Read last year.
Vodafone posted like-for-like sales growth of 3.7% to 10.7 billion euros in the three months to the end of June, as a dip in service revenues in Germany, Italy and Spain was offset by 5.7% growth in the UK, thanks in part to bumper price rises.
Della Valle defended the company’s policy of rising prices well above the rate of inflation, describing it as a “well-established mechanism.”
A CPI-plus-3.9% price rise rate, common among providers in the UK, has led to service costs rising more than 10% over the past year, attracting the attention of media regulator Ofcom, which earlier this year began a review into the policy on whether customers understood the terms of contracts they signed up to and “how this in turn may impact the effective functioning of markets more generally.”
Vodafone shares rose 3.8% to 76.31.
