Vodafone - Three Merger: Now It's Approved, What Does it Mean for Consumers?

The UK Competition and Markets Authority (CMA) just approved the Vodafone and 3 UK merger. This decision is contingent on legally binding commitments, including substantial investment in network infrastructure and protections for consumers and Mobile Virtual Network Operators (MVNOs).

According to Stuart McIntosh, chair of the group leading the CMA investigation, “Having carefully considered the evidence, as well as the extensive feedback we have received, we believe the merger is likely to boost competition in the UK mobile sector and should be allowed to proceed – but only if Vodafone and Three agree to implement our proposed measures.”

While the merger is expected to improve coverage, speeds, and reliability, the question remains: What does this mean for UK mobile users in real terms, and what can we learn from previous M&A activities?

Opensignal’s data provides crucial context for understanding the potential impact of this merger on the UK’s mobile network experience.

Boosted 5G network coverage

The UK has fallen behind other nations in terms of quality of 5G mobile network experience, with room for improvement not only in speed but also in availability and reliability. Vodafone and 3 UK have pledged to address these challenges with a £11 billion investment to build a robust 5G network that reaches 99% of the population.  Both the CMA and Ofcom will monitor the merged company to ensure compliance with these commitments. 

This ambitious plan has the potential to transform the UK’s 5G Coverage Experience. 5G Coverage Experience measures geographic coverage of populated areas and, therefore, more accurately reflects typical users' coverage expectations and experience rather than focusing only on areas with 5G signal. 

In our recent report, we highlighted how the combined networks of Vodafone and 3 UK could significantly enhance rural and underserved areas, addressing long-standing gaps in connectivity and ensuring broader access to high-quality mobile services.

Link to report : "Vodafone and 3 set to create UK’s leading mobile coverage network post-merger"

Lessons from international mergers

Opensignal’s global analyses of telecom mergers provide a glimpse into what UK consumers might expect from this consolidation. Here are some notable examples:

• Malaysia: The Celcom-Digi merger resulted in an increased Digi’s 4G Download Speeds and 4G Video Experience. This was largely driven by shared spectrum resources, such as the 900MHz band, boosting user experience. 

• Indonesia: Indosat Ooredoo and Hutchison 3 merger has significantly impacted the mobile network experience landscape, challenging Telkomsel’s dominance, especially in rural areas nationally and regions outside Java.

• Thailand: The DTAC-Truemove H merger enhanced 5G speeds and video quality, demonstrating the benefits of shared resources.

These examples underscore that when executed effectively, mergers can enhance the mobile experience by leveraging economies of scale, increased spectrum, and resource optimization.

Impact on MVNOs

With the CMA imposing a three-year guarantee on MVNO wholesale terms, Opensignal’s insights on MVNO performance highlight the importance of ensuring these agreements foster innovation and do not compromise the user experience of MVNO subscribers.
 

MVNOs like Giffgaff and Tesco Mobile have played an important role in offering affordable services to cost-conscious consumers. Their ability to thrive post-merger will depend on fair access to the enhanced network and competitive wholesale terms that encourage innovation without compromising user experience.

What’s next?

The merger’s success depends on delivering infrastructure improvements, maintaining competitive pricing and service quality, and addressing potential challenges like fair competition and market concentration. As we have already pointed out, the merger will likely result in the decommissioning of overlapping sites to optimize the combined network. This will have to be managed carefully to ensure end-user performance does not suffer in the process. 

At Opensignal, we’ll closely monitor the UK’s mobile network experience. As Vodafone and 3 UK proceed with their merger plans, we look forward to analyzing how these changes impact user experience across metrics like download speeds, Consistent Quality, and overall Reliability Experience. We will continue to report on 3 and Vodafone separately until they merge their brands. Stay tuned for our upcoming insights on how this merger reshapes the UK’s digital landscape.