Vodafone and Three in talks to combine all their operations in Britain

The combination would create a business with about 27 million customers in the UK

A spokesman for Vodafone Ireland said there were no implications for operations in the Republic from the merger plans in Britain.

Vodafone Ireland said there will be no implications for its operations in the Republic after Vodafone and Hutchison Three in Britain said they were in talks about merging their operations there. 

Combining Vodafone UK and Hutchison's Three, Britain's third and fourth largest networks respectively, would create a business with about 27 million customers - more than current leaders BT's and Virgin Media O2.

However, a spokesman for Vodafone Ireland said there were no implications for operations in the Republic from the merger plans in Britain.

According to figures from the Commission for Communications Regulation, or ComReg, there are around 5.5 million mobile subscriptions in the Republic, or over 8.3 million when mobile broadband and so-called machine-to-machine subscriptions were included.    

At 35.3%, Vodafone has the largest share, followed by Three at 29.8%, with Eir on a share of 21.6%. Tesco Mobile, Virgin Mobile, and others account for the rest of the market, according to the figures. 

Including mobile broadband and machine-to-machine subscriptions, Three has the largest market share at 41.3% of all mobile subscriptions in the second quarter, followed by Vodafone with a share of almost 35%.    

In Britain, Vodafone said it would own 51% and Hutchison 49% under the deal being discussed, with the stakes achieved by adjusting ownership of debt rather than exchanging any cash.

"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," Vodafone said in a statement.

The two companies hope to strike a deal by the end of the year, according to a Sky report. Vodafone shares rose 3% in London.

Vodafone chief executive Nick Read said in February the company was pursuing mergers in multiple European markets to improve returns where players barely cover the costs of the capital required to invest in networks.

Regulators have previously opposed deals that reduce the number of networks in major markets from four to three, but there have been signals that position has changed since the pandemic. Hutchison attempted to buy Telefonica's O2 network in Britain seven years ago but was blocked by regulators.

Additional reporting Reuters