Vodafone Group and CK Hutchison have completed the long-anticipated merger of their UK mobile operations, officially forming a new entity called VodafoneThree.
The deal, finalised on 31 May marks one of the most significant telecoms mergers in the UK in recent years.
Vodafone holds a 51% stake in the new company, while CK Hutchison’s telecom subsidiary retains the remaining 49%. VodafoneThree will be fully consolidated into Vodafone’s financial results, with Max Taylor, former CEO of Vodafone UK, stepping in as Chief Executive. Darren Purkis, previously CFO of Three UK, has been named Chief Financial Officer of the merged business.
Both entities have agreed to contribute £800 million of equity into VodafoneThree to support the working capital requirements of the business (£408 million from Vodafone and £392 million from CKHGT). £600 million of this funding will be contributed shortly after closing, with the remaining £200 million to follow in Q1 2026.
The new entity plans to invest £11 billion over the next decade, with a major focus on building out one of Europe’s most advanced 5G networks. In its first year, the company is set to spend £1.3 billion on capital expenditure to accelerate its rollout plans.
VodafoneThree is targeting £700 million in annual synergies from cost savings and capex efficiencies by the fifth year post-merger. Vodafone expects the deal to be accretive to its adjusted free cash flow beginning in FY29. Pro forma financials for the combined business will be published once full alignment with Vodafone’s accounting policies is completed.
Commenting on the completion, Vodafone Group CEO Margherita Della Valle said:
“The merger will create a new force in UK mobile, transform the country’s digital infrastructure, and propel the UK to the forefront of European connectivity. We are now eager to kick off our network build and rapidly bring customers greater coverage and superior network quality.”
She added that the transaction completes Vodafone’s reshaping of its European operations and positions the group for long-term growth.
CK Hutchison’s Deputy Chairman, Canning Fok, added:
“As we have demonstrated in other European markets, scale enables the significant investment needed to deliver the world-beating mobile networks our customers expect. This merger provides that scale. It also unlocks significant shareholder value, returning approximately £1.3 billion in net cash to the Group.”
Andy Aitken, CEO and co-founder of MVNO Honest Mobile commented:
“Vodafone and Three simply don’t have the resources to compete with Virgin Media O2 and EE. Merging could actually create a more competitive market, giving us three strong players instead of two leaders and two laggards.
“The real issue is the UK’s abysmal mobile speeds, falling behind much of Europe. Maybe it’s time to simply rethink the whole system. Imagine if we treated telecom infrastructure like rail or energy—shared, national, and focused on coverage everywhere, not just where profits are highest. It’s a bold move, but it might be the only way to bring UK telecoms up to speed—literally.
“This merger means there are now just three mobile network operators we can work with. But if the CMA can ensure that MVNOs like Honest continue to have access to these networks on fair and non-discriminatory terms, we’ll keep the market competitive and act in consumers’ best interests”.
