The two companies currently face off against Virgin O2 and EE, but it is believed that they are struggling to recoup the investment they have made building their new 5G infrastructure.
Hence reports of a merger. In an update to shareholders, Vodafone said: “As Ofcom has identified, some operators in the UK – Vodafone UK and Three UK – lack the necessary scale to earn their cost of capital...By combining our businesses, Vodafone UK and Three UK will gain the necessary scale to be able to accelerate the rollout of full 5G in the UK and expand broadband connectivity to rural communities and small businesses.”
Vodafone would own 51% of the new business, and Three UK owner CK Hutchison would take the rest. A combined business would have around 27 million customers, and command a 30 percent market share above Virgin O2’s 28 percent and EE’s 26 percent.