Vodafone merger deemed ‘vital’ for offsetting investment costs, Three UK CEO warns

The CEO of Three UK, Robert Finnegan, has warned the £15 billion merger with Vodafone UK is “vital” to enable the required investment scale.

According to Finnegan, who has held the position of CEO at the telecoms giant since 2020, the merger will give the company “the required scale to invest, grow and compete to create a best-in-class network for the UK.”

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This comes Three UK reported a “solid start to the year” despite the company being “impacted by inflationary pressures, and market conditions remain challenging”.

As a result, in its first-quarter results, the group reported a 9% increase in total revenues from £610 million in 2023 to £664 million this year.

Its total margin also increased by 9% to £424 million compared with £389 million last year.

Meanwhile, Finnegan noted: “Our EBITDA-CAPEX remains negative, as it has been since 2020, which is unsustainable long-term.”

He continued: “We have seen a solid start to the year, successfully growing our revenue and margin and adding 6% to our active contract base. However, we continue to be impacted by inflationary pressures, and market conditions remain challenging.”

The move comes as the UK watchdog, Competition and Markets Authority (CMA) recently launched an investigation into the merger as the tie-up between the two telecom giants, announced last year, will reduce the number of mobile networks in Britain from four to three.

However, in a joint statement, the pair said: “We strongly believe (the merger) will strengthen competition in the UK’s mobile sector and enable a significant step-up in the UK’s mobile network infrastructure.”