While legislators examine the proposed merger, executives from Vodafone (VOD.L) and CK Hutchison’s (0001. HK) Three UK businesses said that their 15 billion pound ($18 billion) merger will help British customers, infrastructure, and employment.
As part of their effort to win support from politicians, unions, and competition regulators for the merger announced in June, Vodafone and Three UK have promised to invest 11 billion pounds to construct a 5G network for Britain.
The British government’s antitrust watchdog began looking into the merger last week, and on Tuesday, members of the Commerce and Trade Committee questioned what the agreement would mean for jobs.
According to Vodafone UK’s corporate affairs and sustainability director Nicki Lyons, “we believe that actually jobs will be created as a consequence of this merger both for building the network, to create and support the IT systems, and to maintain this new network.”
She acknowledged that head office duplication may be a problem and stated that the corporations were not currently providing statistics.
According to the trade group Unite, the contract would result in greater expenses and job losses.
Both firms’ representatives said that as the third- and fourth-ranked participants, respectively, in the British mobile market, they had the resources necessary to invest in and compete with the two largest operators, BT’s (BT.L) EE, and VM O2, which are jointly owned by Telefonica (TEF.MC) and Liberty Global (LBTYA.O).
They said Britain’s 5G network will continue to lag behind those of other European countries without the agreement.
Chief Technical Officer of Three David Hennessy stated, “Neither we nor Vodafone can invest sufficiently to build the type of 5G network that is required.”
The two businesses have long been aware that authorities, who have previously vetoed agreements that would decrease the number of networks in large areas from four to three, would closely scrutinize any proposed combination.
But according to Stephen Lerner, general counsel for Three, the partnership would not result in higher customer prices.
He said that the combined firm would be anxious to price competitively to ensure it filled the increased capacity it wanted to develop, adding, “We are not planning any price increases.”
