What Does the Vodafone and Three UK Merger Mean for 5G?

Technology is constantly changing and evolving, with companies always adapting and adjusting their business practices to keep up with industry changes and new customer demands. Often this can mean companies will merge, combining their individual expertise and workforce to give them an advantage over competitors.

Earlier this month, mobile operators Vodafone and Three UK confirmed that they were currently in talks regarding a possible merge of the two companies. With talks reportedly at an advanced stage already, it looks increasingly likely that this merger will go ahead. What effect will this have on the industry, and what will it mean for newly launched 5G services? Keep reading to find out.

The Merger

In what came as a surprise to many, Vodafone and Three UK confirmed earlier this month that they were in advanced talks about a merger between the two companies.

Previously, the UK telecoms regulator Ofcom had maintained that mergers between the country’s four major mobile operators should be prohibited, as they could lead to increased prices for customers. However, Ofcom recently performed a U-turn on this opinion, opening up the floor for talks to take place between the companies.

If the merger between Vodafone and Three UK was to go ahead, the combined company would be the country’s biggest mobile operator, with over 27 million subscribers.

According to reports, Vodafone would own 51% of the newly merged company, while Three UK parent company CK Hutchison would own 49%.

While such a deal would have obvious financial incentives for both parties, Vodafone revealed that collaboration between operators will be necessary to facilitate the ongoing launch of 5G in the UK.

What is 5G?

5G is the name given to the fifth-generation mobile network; it comes as the new network standard after previous versions 1G, 2G, 3G, and 4G.

The technology behind 5G promises to deliver improved peak data speeds, ultra-low latency, increased availability and network capacity, and improved reliability. Greater interconnectivity abilities will allow for interactions between devices, objects, and machines across sectors and industries.

All of the UK’s major mobile operators have launched 5G services and it continues to roll out across the country. It is set to massively improve the mobile internet experience with greater speed and functionality, whether you’re using your mobile to watch films, using your phone to access personal banking or even enjoying blackjack at renowned online casinos without lag, judder or loss of signal.

5G is already available in a number of towns and cities across the UK. However, only a small number of top-of-the-line devices currently come with 5G capabilities and, while most major networks support it, you will need to have a special 5G contract to use it.

The use of 5G is not yet widespread and the rollout is still at a fairly early stage. Despite this, experts are predicting it will significantly improve mobile internet performance.

How will the Merger Affect 5G?

As 5G technology became available in mid-2019, we saw a race between UK mobile operators to integrate it into their services and roll it out to customers across the country as quickly as possible. EE took an early lead, becoming the first operator to offer 5G coverage to 50% of the UK.

However, by May 2022 Three UK had taken the top spot for 5G coverage, which came as Three UK confirmed plans to discontinue its 3G network to focus on 4G and 5G.

However, rolling out a new technology at such a pace and so extensively comes at a price. Studies have shown that, in 2020, the 5G launch in the UK cost €2.7 billion, with this figure expected to rise to €11 billion by 2025.

The issues don’t stop at just the price tag, either. Delays in the rollout of 5G have been attributed to a lack of clear goals and understanding from both operators and government policymakers. Problems with funding, planning, and engineering have caused major setbacks, with the UK now said to be behind its European neighbours in its planned 5G rollout schedule.

With this merger between Vodafone and Three UK, both companies can pool their respective industry experience, expertise, and strength to establish a new, more powerful company. In doing so, they hope to accelerate the 5G rollout and get the UK’s 5G plan back on track, sharing the financial and logistical pressures as one combined company.

While some may fear major operator mergers could result in higher prices for customers, many feel that this merger between Vodafone and Three UK is just what is required to give the UK’s 5G rollout the jump start that it needs.

Conclusion

A merger between any company is a complicated affair, even more so when two giant brands like Vodafone and Three UK are involved. The saga is likely to rumble on for some time and nobody can truly predict what might happen. If the merger does take place, however, it will surely only mean good things for 5G in the UK.