Vodafone and partner defend planned £11bn merger

London — Vodafone and Three UK have pledged to invest £11bn to build a 5G network for Britain as part of their bid to secure backing from politicians, unions and competition authorities for the merger announced in June.

Britain’s antitrust watchdog last week kicked off its examination of the deal, while lawmakers from the business and trade committee on Tuesday asked what the deal would mean for jobs.

“We believe that actually jobs will be created as a consequence of this merger both for building the network, and to create and support the IT systems, and to maintain this new network,” Vodafone UK’s corporate affairs and sustainability director Nicki Lyons said.

The companies are not giving numbers at this stage, she said, and conceded that head office duplication could be an issue. Trade union Unite has warned the deal will result in higher bills and job losses.

Representatives from both the companies said as the current number three and four players in Britain’s mobile market they do not have the scale to invest and compete with the two biggest operators, BT’s EE and VM O2, jointly owned by Telefonica and Liberty Global.

They warned that without the deal, Britain’s 5G network would continue to lag that of other European nations. “Neither us nor Vodafone can invest sufficiently to build the type of 5G network that’s needed,” Three’s chief technical officer David Hennessy said.

The two companies have long known that a proposed merger would face intense scrutiny from regulators who have previously opposed deals that reduce the number of networks in major markets from four to three.

But the tie-up will not result in price rises for consumers, Three’s general counsel Stephen Lerner said.

“We are not planning any increases in price,” he said, explaining that the merged entity would be keen to price competitively to ensure it filled the new capacity it wants to build.

Reuters