A proposed tie-up between Vodafone Group PLC (LSE:VOD) and Three UK is needed, its chief financial officer claimed after it reported a £30 million interim operating loss.
Highlighting reduced capital expenditure over the first six months of the year, Three UK chief financial officer Darren Purkis warned the merger was the only way for the company to ramp up investment.
This comes after the proposed £15 billion deal, which would see the UK’s third and fourth largest mobile networks merge, has faced regulatory scrutiny.
Britain’s Competition and Markets Authority has previously raised concerns that the tie-up could lead to higher prices for consumers, with a report due on the proposal in December.
Three UK reported a £30 million loss for the first half of the year on Thursday, despite a 9% uptick in revenue to £1.34 billion.
The company added capital expenditure had fallen by 16% to £230 million over the period, noting increasing costs had meant investment was “unsustainable”.
“We are having to reduce our capex due to the financial constraints and we've continued to make a loss as a result of the increased cost base,” Purkis said after the results.
“The only viable way for us to invest in a network is through the proposed merger with Vodafone that would unlock £11 billion of investment.”