Vodafone 'held talks' over possible merger with Three

(Image credit: Three)

Vodafone has reportedly held talks about acquiring rival Three in a deal which would reduce the number of mobile operators in the UK from four to three.

Bloomberg claims Vodafone expressed an interest late last year, but discussions did not advance any further and the two parties are not currently in active negotiations over a tie-up.

Market consolidation has been a long-term ambition for the sector, with operators arguing that this would help cut costs and fund investments in full fibre and 5G infrastructure. However, UK regulators have traditionally been eager to maintain the status quo.

Vodafone Three 

Three was forced to abandon a planned £10.25 billion merger with O2 back in 2016 because of hostility from UK and European regulators who feared a reduction from four operators into three would impact competition. The proposal followed similar transactions in other European countries where research suggested prices had risen as a result.

Both parties moved on, with O2 merging with Virgin Media in June 2021, and Three looking for other areas to grow as a pure-play operator in the UK. Three’s parent company CK Hutchison also successfully challenged the EU’s decision to block the O2 deal in 2020, with the European Court of Justice annulling the deal.

Indications are that regulators are softening their stance, and operators are eager to get the ball rolling. A merger or joint-venture between Vodafone and Three would create an entity with nearly 30 million customers to compete with BT-EE and Virgin Media O2 – both of which have gone through tie-ups of their own in recent years.

Three declined to comment on the claims, and TechRadar Pro has contacted Vodafone for comment.

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.