Vodafone has accelerated its talks with CK Hutchison over the possible combination of its UK business with Three in what would create the UK’s largest mobile operator in terms of customer numbers.
Sky News reported Monday that talks that had previously been thought to have been paused had now begun to intensify once again.
Three has been looking at a sale for some time, it’s caught be holding a significant 9 million customers, in a business that needs significant financial investment to take it forward.
Kester Mann, director of consumer and connectivity at CCS Insight, said scale is the leading motivation to join forces. I”n telecommunications, the most successful companies tend to be the largest; bulking up would offer many synergies and cost-saving opportunities. Under the status quo, it’s hard to see either operator growing enough organically to get close to challenging BT and Virgin Media O2 for size in the UK.
“Not so long ago, a tie-up between Vodafone and Three would have felt like an unnatural pairing. But in recent times, Vodafone has taken on more of a challenger role in its home market, so the two operators’ strategies may no longer be too far apart.”
Any concentration of the two businesses would be expected to face a number of regulatory hurdles.