How the VodafoneThree merger is reshaping UK telecoms
The £16.5 billion merger between Vodafone UK and Three UK has created Britain's largest mobile operator, with ambitious 5G investment plans and significant market implications.
The birth of a telecoms giant
The UK's telecommunications sector entered a new chapter in mid-2025, as Vodafone UK and Three UK officially merged, forming VodafoneThree - now the country's largest mobile operator by subscriber base.
This £16.5 billion mega-merger has created a telecoms titan with over 29 million customers, promising large-scale investments and a transformed digital landscape for consumers and businesses alike.
Trading platform users have been watching Vodafone Group shares closely as the merger's impact becomes clearer.
The new entity is projecting £700 million in annual synergies, largely driven by rationalised infrastructure and operational efficiencies.
Investors have been buying the VodafoneThree share since the merger with it currently trading at 79.66 pence, a level last seen in September 2023, up 15% year-to-date.
Investment commitments and financial outlook
VodafoneThree has pledged to invest £11 billion over the next decade into expanding and upgrading its 5G infrastructure, with £1.3 billion committed in its first year alone.
These investments aim to support coverage expansion, network integration, and future readiness as the company targets 99.95% UK population coverage by 2034.
While Vodafone Group's net debt rose by £1.7 billion as a result of the merger, the company maintains strong cash flow positions to uphold its dividend commitments.
Share trading investors should note these significant capital expenditure plans when evaluating the company's prospects.
Spectrum rebalancing and regulatory compliance
A central issue following the merger was VodafoneThree's dominance in licensed spectrum, initially controlling 46% of the total UK spectrum.
To satisfy regulators, VodafoneThree agreed to sell 78.8MHz of spectrum across four bands to VMO2 for £343 million, trimming its spectrum share to 39%.
Vodafone pre-merger and post-merger charts
This redistribution helped balance market power and soothed regulatory concerns without dramatically weakening VodafoneThree's market position.
Online trading participants should consider how this regulatory compliance affects the company's competitive positioning.
Infrastructure challenges and operational scale
One of the lesser-discussed challenges facing VodafoneThree is the physical cost of maintaining an expansive network footprint, particularly its reliance on 3.5GHz spectrum.
At the time of the merger, VodafoneThree operated an estimated 36,000 mobile sites, far more than BT's 19,000.
The company plans to decommission around 10,000 sites but must maintain a minimum of 25,000 as a merger condition.
This infrastructure scale brings considerable operational costs compared to more efficient competitors like BT.
Market performance, investor sentiment and analyst ratings
Despite the merger's operational advantages, investor sentiment remains mixed, with Vodafone shares still near multi-decade lows, despite rising by over 25% from their April low.
Vodafone Group, BT, Telefonica and Liberty Global year-to-date comparison chart
Despite Vodafone Group shares trading higher by around 15% year-to-date, they greatly underperform Virgin Media O2’s owner Telefonica’s and BT’s 32% gain.
Share dealing investors should note that analysts highlight the UK merger as a bright spot for potential long-term recovery.
VodafoneThree has a TipRanks Smart Score of ‘9 Outperform’ versus ‘7 Neutral’ in mid-June but is still rated as a ‘hold’ with 2 ’buy’, 7 ‘hold’ and 2 ‘sell’ recommendations (as of 02/07/2025).
Vodafone Group TipRanks Smart Score
According to LSEG Data & Analytics, 2 analyst have a ‘strong buy’ recommendation for VodafoneThree, 4 a ‘buy’, 11 a ‘hold’, 3 a ‘sell’ and 1 a ‘strong sell’ with a long-term mean price target at 82.19p, 12% above the current share price (as of 02/07/2025). This is exactly the same as in mid-June.
Vodafone Group LSEG Data & Analytics chart
VodafoneThree technical analysis
The Vodafone Group share price is trading in 1 ¾ year highs and managed to break through its 78.76p-to-79.50p key resistance area on a weekly chart closing basis at the end of June. This rise above the October 2023-to-May 2025 highs is technically bullish and could lead to the September 2023 high at 82.56p and the December 2022 low at 83.24p being reached in the coming weeks and months.
Vodafone Group weekly candlestick chart
Minor support can be found down to the 78.76p late May high and around the 20 June peak at 77.74p.
While the early June low at 71.90p underpins, the medium-term uptrend is deemed to be intact.
Vodafone Group daily candlestick chart
How to trade VodafoneThree developments:
- Research the telecommunications sector and merger implications
- Choose whether you want to trade or invest
- Open an account with us
- Search for Vodafone in our platform or app
- Place your trade
Remember that telecommunications stocks can be affected by regulatory changes and infrastructure costs. All trading carries risk, so consider your investment goals and risk tolerance before trading.
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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