Vodafone UK in talks with CK Hutchison's Three UK for possible merger

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Global telecom giant Vodafone has confirmed that its United Kingdom-arm is in talks with CK Hutchison, the owner of Three UK, for a possible merger, Britain's Sky News reported on October 3.

The merger is aimed at creating a market leading operator that could speed up the launch of 5G in the UK and expand broadband connectivity in the country, news agency Reuters reported, citing a statement issued by Vodafone.

The deal would combine the two companies' UK-based businesses, with Vodafone holding the larger stake, of 51 percent, in the merged entity and CK Hutchison owning the remaining 49 percent, the reports added.

“By combining our businesses, Vodafone UK and Three UK will gain the necessary scale to be able to accelerate the rollout of full 5G in the UK and expand broadband connectivity to rural communities and small businesses,” Bloomberg quoted Vodafone's statement as saying.

A Vodafone-Three UK tie-up has been considered to be on the cards for years, as CK Hutchison has already joined hands with Vodafone in Australia.

According to the Sky News report, Vodafone and Hutchison are aiming to strike the merger deal by 2022-end. The UK-arm of Vodafone is the country's third-largest network and Three is the fourth-largest. A combined entity, as per Reuters, would create a business with 27 million customers.

Currently, BT's EE and Virgin Media O2 are leaders in the UK telecom market.

In India, Vodafone had announced a tie-up with Idea in 2017, and the merger was completed the next year. The combined entity is currently the country's third-largest cellular network provider.

With inputs from agencies