Telecom operators Vodafone and Three UK are in merger talks

CTOnews.com, Oct. 4, according to the Guardian, telecom operator Vodafone has confirmed that it is in merger talks with CK Hutchison, the parent company of Three UK. Before that, Vodafone complained about the high cost of running a mobile network. In July, Vodafone CEO Nick Read said the decline in mobile networks in the UK would make the industry healthier.

As for the talks, Vodafone said, "in the envisaged deal, the two companies will merge their UK operations, with Vodafone having a 51 per cent stake and partner CK Hutchison owning 49 per cent of the combined business."

Vodafone and Three UK together would be the third big deal merger the UK has seen in the past decade. Previously, T-Mobile and Orange merged to form EE. Then, a few years ago, Virgin Media and O2 merged to create Virgin Media O2. In about a decade, Britain's five major operator networks will shrink to three.

Vodafone went on to explain its motivation for seeking a merger.

"the conditions to ensure the prosperity of market competition need to be cultivated, otherwise the UK may lose the opportunity to become a leader of 5G. As Ofcom points out, some British operators-Vodafone UK and Three UK-lack the necessary scale to earn their cost of capital. By merging our operations, Vodafone UK and Three UK will gain the necessary scale to accelerate the full roll-out of 5G in the UK and expand broadband connectivity to rural communities and small businesses. "

CTOnews.com has been informed that as long as the two companies agree to merge, approval from the Competition and Market Administration may be required to ensure that the move is not monopolistic.