Vodafone said it planned to invest some £1.3 billion in capital expenditures on its network over the next year as it completed the merger of its domestic UK operations with Three UK, reducing the number of mobile operators in the country from four to only three.

The combined business, to be called VodafoneThree, is 51 percent owned by Vodafone Group and the remaining 49 percent is owned by Three’s former sole owner, Hong Kong-based CK Hutchison.

Vodafone had agreed to invest £11bn in its network over the next 10 years in negotiations with the UK’s competition regulator, the Competition and Markets Authority, to assuage concerns about the effect the mega-merger could have on consumers.

Investment

The deal, announced in 2023, was criticised as potentially leading to higher prices, while the Unite union said it could lead to up to 1,600 job losses.

Vodafone rejected that figure, saying the merger would lead to the creation of jobs.

In order to get the go-ahead from the CMA it agreed to a set of legally binding commitments including the capital expenditure plans and retaining certain existing mobile tariffs and data plans for at least three years, including on sub-brands.

It must also expand 5G coverage and offer short-term protections against consumer price rises.

VodafoneThree said in its first year expenditures would involve enabling multi operator core network (MOCN) functionality, allowing customers from each of the two networks to access the other.

Vodafone Group chief executive Margherita Della Valle said the deal would “transform the country’s digital infrastructure” and said the combined entity was eager to “rapidly bring customers greater coverage and superior network quality”.

The group’s remaining competitors in the UK are BT/EE and Virgin Media O2.

Competition fears

Following an in-depth Phase 2 investigation, the CMA concluded in September 2024 that the merger could lead to “millions of customers having to pay more” and could harm the position of mobile virtual network operators such as Sky Mobile, Lyca, Lebara and iD Mobile.

In December of last year the regulator said it had decided the merger should be allowed to proceed if the companies signed binding commitments to invest billions to roll out a combined 5G network across the UK.

It said at the time that the network commitment would be supported by shorter-term customer protections which would require the merged company to cap certain mobile tariffs and offer preset contractual terms to MVNOs for three years.