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Vodafone UK and Three UK join forces to form a powerhouse in the European 5G network landscape

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Vodafone Group Plc and CK Hutchison Group Telecom Holdings Limited have reached binding agreements to combine their UK telecommunication businesses.

According to the Vodafone website, Vodafone will own 51% of the combined business, while CK Hutchison will own 49%.

The merger aims to provide better network coverage and reliability to millions of customers of Vodafone UK and Three UK from the beginning.

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“Customers can expect improved data speeds and flexible, contract-free offers. MergeCo plans to achieve over 99% coverage of the UK population with its 5G network by 2034,” the firm noted.

The combined business will invest £11 billion in the UK over ten years, creating one of Europe’s most advanced standalone 5G networks.

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This investment supports the UK Government’s targets and is expected to generate significant economic benefits, job creation, and digital transformation. Standalone 5G access will be available to every school and hospital in the UK by 2030.

The merger will introduce a third operator with substantial scale, increasing competition among the leading converged operators in the UK. It will also provide more choices for wholesale partners and enhance fixed wireless access (mobile home broadband) availability to 82% of households by 2030.

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The Transaction involves no cash consideration, with Vodafone UK and Three UK businesses contributing differential debt amounts to achieve a 51:49 ownership split between Vodafone and CK Hutchison.

The merger is expected to result in significant cost and capital expenditure synergies, amounting to over £700 million annually by the fifth year, with a net present value (NPV) of over £7 billion.

The current Chief Executive Officer (CEO) of Vodafone UK, Ahmed Essam will become the CEO of MergeCo, while Darren Purkis, the current CFO of Three UK, will serve as the MergeCo CFO.

The Transaction is subject to regulatory and shareholder approvals and is expected to close before the end of 2024.

The CEO of Vodafone Group, Margherita Della Valle believes that “The merger will benefit customers, the country, and competition.”

She emphasizes the creation of a best-in-class 5G network, supporting the UK’s technology ambitions.

“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 game changer 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, the Group Co-Managing Director of CK Hutchison, highlights the scale provided by the merger, enabling investments and competition.

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Diana Mutheu
Diana Mutheu
Diana Mutheu is a Tech enthusiast, happy to delve deeper into the African tech space covering Social Media, AI, Startups, Telcos, Cryptocurrency, Big Data, Women in Tech and all matters Tech. Write to me @[email protected]

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