Newly formed VodafoneThree vows to create thousands of jobs

VodafoneThree, the newly formed leader in the UK’s mobile market, is aiming to more than double its broadband business by 2034, as it pledged to create thousands of jobs and upgrade its network.

Vodafone has become the fastest growing provider of home broadband since expanding beyond mobile services in 2015, and now plans to grow its customer base from 2 million to more than 4 million over the next eight years after the merger.

VodafoneThree has deals in place with CityFibre and Openreach to target its services to customers, and on Thursday announced a new partnership with London-focused Community Fibre.

The merger of Vodafone’s UK arm with Three creates a business with 27 million customers backed by a pledge to invest £11bn over the next decade to roll out next-generation 5G services across the UK.

However, the deal will also result in the closure of retail stores on the high street and in shopping centres. VodafoneThree plans to close some of its almost 650 retail stores on high streets and in shopping centres but create about 400 customer service jobs previously outsourced overseas.

Three UK has about 290 stores, and Vodafone, which controls 51% of the new UK joint venture, has about 350 outlets.

The overlap in many locations means that as VodafoneThree combines its businesses, an unspecified number in close proximity will be shut.

“There will be a consolidation [of stores] to neighbouring [Vodafone and Three UK] premises,” said Max Taylor, the chief executive of VodafoneThree, in a presentation. “However, there will be no redundancies. Staff levels will come down over time naturally.”

Taylor said that the company would not look to boost its customer base by considering a takeover of the troubled rival telecoms and broadband company TalkTalk.

TalkTalk, which was founded by Sir Charles Dunstone, is the UK’s fourth-largest telecoms group, with about 3.2 million customers.

However, the business is struggling to stem a customer exodus and is facing financial difficulties, which has made it a potential takeover target, with BT and Virgin Media O2 having looked at the possibility of mounting a bid.

James Ratzer, an analyst at New Street Research, said: “We genuinely believe that almost regardless of the price, Vodafone is so focused on the integration of Three UK for the next few years that a TalkTalk integration would not be possible for them to take on.”

The £16.5bn merger of the companies, bringing together the third and fourth largest mobile operators in the UK, has been underpinned by a pledge to invest billions in extending 5G mobile coverage across the UK.

The new company, which has about 13,500 employees, has said it will provide more than 99% of the UK with 5G coverage by 2034.

The first £1.3bn of its £11bn investment will be made this year.

“I’m delighted that this huge investment is being made in mobile phone network infrastructure, better connecting people with families, loved ones and work by providing stronger, more widespread 5G coverage,” the chancellor, Rachel Reeves, said.