Three UK is “spending more than we’re earning” making its future unsustainable unless it merges with Vodafone Group PLC (LSE:VOD), the mobile network operator’s chief executive Robert Finnegan had admitted.
Finnegan said the company had pumped large sums of money into its 5G network and needed more cash to survive.
"Looking to the future, high levels of investment will still be needed to deliver the networks that the UK requires but levels of capex spread across the current set of four individual players are unsustainable,” The Telegraph quoted him as saying.
Darren Purkis, Three’s chief financial officer, stated in plain terms: “Very simply, we’re spending more than we’re earning. It’s unsustainable in the long term.”
The oft-discussed and potentially soon-to-be-announced merger between Vodafone and Three, which is owned by Hong Kong group CK Hutchinson, would result in a network of over 27 million customers.
However, the combination would also face scrutiny under the National Security and Investment Act, introduced in 2021 to address foreign mergers of companies central to the national interest.
On the subject of regulatory scrutiny, Purkis stated: “I don’t want to comment on political issues, but I think that ownership at the moment is strong and has never really been called into question.”
“(CK Hutchinson) invested heavily into the UK across a number of sectors and businesses for a number of years. I think they’ve been known in the UK for a long time and provided significant volumes of jobs and investment.”