New independent report finds VodafoneThree merger delivering greater value, wider coverage and faster networks

UK evidence strengthens the case to modernise Europe’s investment rules to reflect the consumer benefits of scale and long-term investment

A year after Vodafone and Three combined their UK businesses, a new independent report by Frontier Economics shows that the merger is already delivering tangible consumer benefits, driven by greater scale, faster integration and improved efficiency.

At announcement, Vodafone and Three said the merger would be great for customers, the country and competition, committing to invest £11 billion over the following 10 years to create one of Europe’s most advanced 5G networks. 

The report, The Vodafone-Three Merger: One Year On, found that early results from the multi-year network plan are already delivering on that promise. The combined VodafoneThree network has demonstrated measurable improvements in performance, capacity and coverage within its first year.

As a result, millions of customers are experiencing stronger, faster and more reliable connectivity without upward pressure on prices. Retail competition remains strong including from MVNOs with none of them having the need to utilise the MVNO wholesale reference offer established as part of the merger remedies.

In the first 12 months following completion, VodafoneThree delivered:

• 38% faster average 5G download speeds, alongside significant improvements in latency and reliability.
  
  
• More value for customers from lower cost per GB and higher usage, driven by expanded network capacity.
  
  
• More than 16,500 km² of ‘not spots’ eliminated – an area just over half the size of Belgium – bringing connectivity to areas previously underserved or not covered at all.
  
  
• Network integration delivered at scale within weeks, with spectrum deployed across c.15,000 sites and 4G speeds rising by an average of 20% for more than 7 million customers.
  
  
• A step-change in network usage, with data traffic growth accelerating to around 25%, well above the UK national average.

Joakim Reiter, Vodafone Group Chief External & Corporate Affairs Officer said: 

“The UK experience provides clear, real-world evidence that consolidation can deliver better outcomes for consumers. One year on, the Vodafone–Three merger is already driving better networks, broader coverage and improved value, while sustaining healthy retail competition across the market. This shows there is no inherent trade-off between scale and competition in infrastructure-based industries like telecoms."

“Europe is at a critical juncture in modernising its competition framework. The EU now has a unique opportunity to adopt a more future-proof approach, free from outdated biases, with fair, evidence-based assessments in the service of customers, competition and investment. The UK experience clearly shows this is possible.”

The report comes as Europe reviews its merger guidelines to better reflect the role of scale, investment and long-term network quality in telecoms markets. Drawing on its experience of securing merger clearance in the UK, Vodafone has identified four priorities for future European merger assessments:

- Consider quality as well as price. Consumers care about more than just what they pay. They also value network coverage, reliability, speed and security.  Merger assessments should recognise that better connectivity and wider coverage can be important consumer benefits alongside affordable prices.

- Assess benefits and risks on an equal footing. The Commission should apply the same weight and rigour to merger benefits as to potential harms. The current approach risks starting from a presumption of harm, and systematically discounts efficiencies – particularly when benefits including investment, innovation, resilience and coverage improvements take time to deliver or are harder to quantify.

- Take a long-term view aligned with real-world investment cycles. Telecoms is a capital-intensive sector and infrastructure benefits materialise over time. Assessing impacts over too short a timeframe risks understating the full value of merger-driven investments. Evaluation periods should reflect the full lifecycle of network deployment so that long-term consumer benefits are properly recognised.

- Recognise the importance of in-country scale. Telecoms investment is inherently local, spanning spectrum, sites, coverage and resilience delivered at national level. The scale needed to sustain investment and competition should therefore be assessed at that level. The merger guidelines should adopt a practical, market-based approach that recognises the benefits of in-country scale while supporting cross-border scale.