Margherita Della Valle, the CEO of Vodafone, expressed her satisfaction with the improved performance in almost all European markets, while acknowledging that there is still further to go. The release of these figures comes in the wake of Vodafone’s recent confirmation of plans to merge with Three, a smaller rival, creating the largest mobile network in the UK.
Both companies have emphasized that this merger will not result in higher consumer prices. Nevertheless, it is likely that competition regulators will scrutinize the deal due to the reduction in the number of market players from four to three. Furthermore, concerns regarding national security may also arise as Three has connections to the Chinese state through its owner, CK Hutchison, based in Hong Kong. In the joint venture, Vodafone will maintain a 51% stake, while CK Hutchison will own 49%.
Ahmed Essam, the UK boss of Vodafone, expressed confidence in the company’s ability to make a strong case in any national security review.
The merger with Three is part of Vodafone’s efforts to reinvigorate growth following a challenging period that has seen a 60% decline in its share price over the last three years. In addition to the merger, Vodafone announced earlier this year that it plans to cut 11,000 jobs over the next three years as a cost-cutting measure. The company is also exploring options for its business in Spain, including a potential sale.
Furthermore, Vodafone revealed the appointment of Luka Mucic, the former finance director of German software giant SAP, as its new CFO. Mucic will assume the role in September and will receive a base salary of £760,000, with the potential for a bonus of up to £1.5m.
Vodafone has reiterated its guidance for full-year earnings of €13.3bn and adjusted free cash flow of €3.3bn.
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