Three UK and Vodafone Merger

Three UK has reported a pre-tax loss of £30 million for the first half of the year, a significant improvement from the £76 million loss recorded during the same period last year. The company attributes its ongoing financial struggles to the rising costs associated with operating and enhancing its mobile network, which have been exacerbated by inflation. Despite these losses, Three UK has managed to grow its customer base by 3%, reaching 10.9 million subscribers, largely due to its budget mobile network Smarty and broadband services. The planned merger with Vodafone, valued at £15 billion, aims to create the largest mobile network in the UK. However, the deal is currently under scrutiny by regulators, delaying its approval. Chief Executive Robert Finnegan emphasized that the merger is crucial for unlocking £11 billion in investment for digital infrastructure, which he believes will lead to a superior 5G network and bolster the UK economy. Finnegan expressed concerns over the sustainability of current investments, noting that Three UK has faced negative cash flows since 2020, with operational costs nearly doubling over the past five years. The merger, if approved, would reduce the number of mobile networks in Britain from four to three, with EE and O2 being the remaining competitors. The Competition and Markets Authority (CMA) is currently conducting a thorough investigation into the merger, with a deadline set for December 7 to publish its findings. The CMA has indicated that the complexity of the sector necessitates a comprehensive review.