Vodafone Group’s chief executive Margherita Della Valle has said that the new Labour government will fail to achieve its promise of nationwide access to 5G by 2030 if the company’s proposed £15 billion merger with Three UK is blocked, according to a Guardian report.
The government said in its election manifesto that nationwide coverage was needed by the end of the decade because the UK was falling behind other countries in terms of the investment and rollout of advanced mobile networks.
The UK ranks 22 out of 25 European countries for 5G availability and download speeds, according to research published by Opensignal in February.
“Everyone now talks about [things like] artificial intelligence, all of these things cannot happen without good networks,” Della Valle said.
“All policymakers understand now the importance of having good quality networks. Look at Labour’s manifesto, for example … nationwide 5G by 2030. There is no doubt that a catalyst is needed to get there because it’s not going to be done [by the current market].”
Vodafone’s planned merger with Three, which would create the UK’s largest mobile operator with more than 27 million subscribers, is being investigated by the Competition and Markets Authority.
In April, the CMA launched an in-depth probe into the deal, citing concerns that reducing competition among UK’s mobile network providers could result in price rises for consumers.
Last year, the trade union Unite called the deal “terrible”, claiming that mobile phone bills could rise by as much as £300 a year if the merger was approved.
However, Vodafone and Three have said that the deal is essential to drive investment and compete against the BT and Virgin Media O2, including on competitive pricing.
As part of the takeover, the two companies have pledged to invest £11 billion over the next decade to upgrade and expand their 5G network.
“It is a really big decision for the UK, a big industrial policy decision,” Della Valle said. “Everyone thinks about the impact on telcos [telecommunications operators]. The reality is our industry is one of a handful that impacts on many other sectors, [on] everyday life. It is critical for economic growth more broadly.”
Della Valle said that if the merger was not approved, Vodafone would be forced to cut investment.
“We don’t have the scale to invest, especially for something like 5G across the board, which is what the UK needs,” she said. “The cost [of the deal being blocked] is even more constrained investment. [The deal] is going to close between now and the end of the year but the next few months are going to be the critical ones.
“At the moment, the UK has been lagging behind. By creating a third scale operator – [from] the two little guys – the merger has the ability to unlock this.”