1 00:00:00,080 --> 00:00:02,320 Speaker 1: Margaret to the deal has been approved. The merger has 2 00:00:02,360 --> 00:00:05,520 Speaker 1: been approved. Man. We will take that as validation of 3 00:00:05,559 --> 00:00:08,879 Speaker 1: your strategy. What does it mean for the outlook for 4 00:00:09,039 --> 00:00:10,959 Speaker 1: Vodaphone in the years ahead. 5 00:00:11,160 --> 00:00:14,720 Speaker 2: Let me first say Tom that today's announcement is great 6 00:00:14,760 --> 00:00:17,880 Speaker 2: news for the UK because the CMA has given us 7 00:00:17,920 --> 00:00:21,720 Speaker 2: screen light to create this new force in UK telecoms, 8 00:00:21,960 --> 00:00:27,600 Speaker 2: a force that will increase competition and investment and ultimately 9 00:00:27,720 --> 00:00:34,000 Speaker 2: give the UK the infrastructure that it truly deserves. For 10 00:00:34,120 --> 00:00:39,040 Speaker 2: Vodafone specifically, it's the final move for us in reshaping 11 00:00:39,280 --> 00:00:43,320 Speaker 2: Europe for growth. When I became CEO last year, I 12 00:00:43,440 --> 00:00:49,320 Speaker 2: said that we were addressing three markets Italy, Spain and 13 00:00:49,360 --> 00:00:53,480 Speaker 2: the UK. And we are now completing in this era 14 00:00:53,560 --> 00:00:57,640 Speaker 2: of transition our strategy and we will look forward to 15 00:00:57,720 --> 00:00:59,960 Speaker 2: next year in which you will see the new reshape 16 00:01:00,320 --> 00:01:05,360 Speaker 2: Vodafon in Europe, geared for an acceleration of our growth and. 17 00:01:05,240 --> 00:01:08,320 Speaker 1: You will be the biggest company, the biggest telecoms company 18 00:01:08,319 --> 00:01:11,880 Speaker 1: in the UK by revenues. Give us a steer if 19 00:01:11,920 --> 00:01:15,479 Speaker 1: you can, Margarita a ballpark figure in terms of what 20 00:01:15,560 --> 00:01:18,880 Speaker 1: you think this does to the uplift for revenues for 21 00:01:18,959 --> 00:01:21,559 Speaker 1: roaud Defone for twenty twenty five twenty twenty six. 22 00:01:22,080 --> 00:01:24,920 Speaker 2: I would say Tom, this is not about revenues. The 23 00:01:25,720 --> 00:01:31,600 Speaker 2: rationale of the merger is to unlock investment, infrastructure investment. 24 00:01:32,040 --> 00:01:36,920 Speaker 2: With the combination between Vodafon Entry, we unlock scale in 25 00:01:36,959 --> 00:01:40,319 Speaker 2: our networks, which is what will allow us to build 26 00:01:41,000 --> 00:01:45,880 Speaker 2: the biggest, the best network in the UK, reaching ninety 27 00:01:46,000 --> 00:01:50,200 Speaker 2: nine percent of the UK population. That's what we do 28 00:01:50,280 --> 00:01:53,160 Speaker 2: for a living. We want to invest. We want to 29 00:01:53,200 --> 00:01:55,720 Speaker 2: invest to give a better service to our customers and 30 00:01:55,760 --> 00:01:59,080 Speaker 2: we want to invest to drive growth in our markets, 31 00:01:59,480 --> 00:02:03,919 Speaker 2: which is where revenues come from. But the most important 32 00:02:03,960 --> 00:02:08,440 Speaker 2: point for the financial set top of Vodafone is that 33 00:02:08,639 --> 00:02:12,880 Speaker 2: all the markets in which Vodafone will operate next year, 34 00:02:13,560 --> 00:02:17,560 Speaker 2: including the UK, will be growth markets where our own 35 00:02:17,600 --> 00:02:21,320 Speaker 2: scale will allow us to drive growth with good returns. 36 00:02:21,720 --> 00:02:25,240 Speaker 1: And you focused on that investment piece, eleven billion pounds 37 00:02:25,440 --> 00:02:28,919 Speaker 1: of investment. When does that investment start, Margarita, and how 38 00:02:28,960 --> 00:02:30,480 Speaker 1: will you be financing it? 39 00:02:30,480 --> 00:02:33,200 Speaker 2: It starts as soon as we complete We still have 40 00:02:33,520 --> 00:02:37,080 Speaker 2: a few weeks to go as we go apply the 41 00:02:37,120 --> 00:02:41,480 Speaker 2: final legal touches with the CMA and our partners, we 42 00:02:41,560 --> 00:02:45,679 Speaker 2: will complete in alf one twenty twenty five, and as 43 00:02:45,720 --> 00:02:48,959 Speaker 2: soon as we complete, we will start investing, which is 44 00:02:49,000 --> 00:02:55,280 Speaker 2: why although typically big infrastructure projects take time, our customers 45 00:02:55,360 --> 00:03:00,520 Speaker 2: will already see the benefit into next year of a bigger, 46 00:03:00,680 --> 00:03:05,480 Speaker 2: better broader network. In terms of funding, you know that 47 00:03:05,960 --> 00:03:09,160 Speaker 2: the other activity we have done this year as part 48 00:03:09,280 --> 00:03:12,040 Speaker 2: of the reshaping of Vodafone in Europe is to reshape 49 00:03:12,120 --> 00:03:15,360 Speaker 2: our balancee. So we have all the funding we need 50 00:03:15,400 --> 00:03:16,680 Speaker 2: to execute on our plan. 51 00:03:16,840 --> 00:03:18,560 Speaker 1: Okay, so you fund it from the balance sheet. You 52 00:03:18,639 --> 00:03:21,040 Speaker 1: have the funding that you need. The deal closes in 53 00:03:21,040 --> 00:03:23,760 Speaker 1: the first half of next year, that's the expectation. What 54 00:03:23,880 --> 00:03:28,480 Speaker 1: is the timeframe for the integration between the two businesses 55 00:03:29,000 --> 00:03:31,840 Speaker 1: and what kind of cuts maybe you might be looking 56 00:03:31,880 --> 00:03:34,200 Speaker 1: at in terms of efficiencies between the two businesses. 57 00:03:34,320 --> 00:03:39,000 Speaker 2: Sure, it's clearly early days to talk about this because 58 00:03:39,040 --> 00:03:42,080 Speaker 2: the two companies won't be allowed to operate together and 59 00:03:42,160 --> 00:03:47,560 Speaker 2: therefore design the full detailed integration plan until we complete 60 00:03:47,960 --> 00:03:52,520 Speaker 2: in the first half of twenty twenty five. But specifically 61 00:03:52,640 --> 00:03:55,400 Speaker 2: on the points of jobs, let me be very clear. 62 00:03:55,960 --> 00:03:59,600 Speaker 2: This merger, as we've just discussed, is about investment, is 63 00:03:59,640 --> 00:04:03,800 Speaker 2: not about cost cutting. What that means is that of course, 64 00:04:03,800 --> 00:04:08,800 Speaker 2: with an eleven billion investment plan, thousands of jobs will 65 00:04:08,800 --> 00:04:12,720 Speaker 2: be created, and more broadly, outside of the telecom ecosystem, 66 00:04:13,200 --> 00:04:17,159 Speaker 2: you will have businesses across the UK that will get 67 00:04:17,160 --> 00:04:21,039 Speaker 2: the benefits of a better network for their own growth. 68 00:04:21,240 --> 00:04:25,040 Speaker 2: Of course, as always as we combine two companies, there 69 00:04:25,080 --> 00:04:29,000 Speaker 2: will be areas of overlap, but the net result of 70 00:04:29,520 --> 00:04:32,680 Speaker 2: the merger is going to be an increasing employment across 71 00:04:32,720 --> 00:04:33,080 Speaker 2: the UK. 72 00:04:33,320 --> 00:04:36,800 Speaker 1: Okay, but specifically for Vodaphone. As you look for those synergies, 73 00:04:36,920 --> 00:04:39,480 Speaker 1: but also that investment, what does that do for headcount 74 00:04:39,520 --> 00:04:40,400 Speaker 1: in the years ahead. 75 00:04:40,800 --> 00:04:43,360 Speaker 2: This is something we will be working on with our 76 00:04:43,440 --> 00:04:47,440 Speaker 2: partners as soon as we are allowed to complete. In 77 00:04:47,480 --> 00:04:50,599 Speaker 2: the grand scheme of think think about it as small 78 00:04:50,880 --> 00:04:53,960 Speaker 2: as the impact of the merger. Of course, to give 79 00:04:54,000 --> 00:04:56,760 Speaker 2: you an example, there will be duplication in the heads offices, 80 00:04:56,800 --> 00:05:02,200 Speaker 2: but they have nothing in comparis reason to the investment 81 00:05:02,880 --> 00:05:04,440 Speaker 2: plan that we have in mind. 82 00:05:05,160 --> 00:05:07,680 Speaker 1: What will it mean? Critics of course have suggested it's 83 00:05:07,720 --> 00:05:11,280 Speaker 1: going to mean higher prices for customers. Mobile prices will 84 00:05:11,320 --> 00:05:14,120 Speaker 1: be capped for three years as a result of this 85 00:05:14,400 --> 00:05:17,440 Speaker 1: deal with the CMA and this merger, but post that 86 00:05:17,560 --> 00:05:20,440 Speaker 1: three year period, the prices go up for consumers. 87 00:05:20,560 --> 00:05:23,320 Speaker 2: This is a really important point you are raising because 88 00:05:23,720 --> 00:05:28,560 Speaker 2: the CMA is really establishing here a very important point. 89 00:05:28,960 --> 00:05:33,000 Speaker 2: They have established the link that we all know exists 90 00:05:33,000 --> 00:05:37,920 Speaker 2: between investment and competition. What that means is that more 91 00:05:38,000 --> 00:05:42,400 Speaker 2: investment will drive more competition on investment itself across all 92 00:05:42,480 --> 00:05:45,159 Speaker 2: players in the UK, which will be good for customers. 93 00:05:45,360 --> 00:05:48,680 Speaker 2: But also with a bigger a better network, we will 94 00:05:48,720 --> 00:05:52,560 Speaker 2: have more capacity that will mean more competition on the 95 00:05:52,600 --> 00:05:55,880 Speaker 2: retail front. Let me remind you that in the UK 96 00:05:56,080 --> 00:05:59,400 Speaker 2: market we are in one of the most competitive retail 97 00:05:59,520 --> 00:06:05,800 Speaker 2: market across Europe. We have tens of brands competing for customers. 98 00:06:06,080 --> 00:06:09,000 Speaker 2: That is not going to change. What is going to 99 00:06:09,120 --> 00:06:12,119 Speaker 2: change is now these retail brands will have a much 100 00:06:12,120 --> 00:06:14,400 Speaker 2: better infrastructure to support them. 101 00:06:14,520 --> 00:06:17,440 Speaker 1: Margritter, you've pointed to the key markets outside of the UK, 102 00:06:17,560 --> 00:06:19,599 Speaker 1: Italy and Spain. Do you expect this deal to be 103 00:06:19,640 --> 00:06:23,880 Speaker 1: a catalyst for consolidation, further consolidation in the European market? 104 00:06:23,920 --> 00:06:26,120 Speaker 1: And what do you say to governments in Europe, some 105 00:06:26,200 --> 00:06:29,960 Speaker 1: of them who are reluctant and are cautious about consolidation, this. 106 00:06:30,080 --> 00:06:34,560 Speaker 2: Deal could represent a good precedent for the rest of Europe. 107 00:06:34,600 --> 00:06:38,240 Speaker 2: I think all governments are now aware of the fact 108 00:06:38,320 --> 00:06:43,880 Speaker 2: that Europe is falling behind in terms of its technology infrastructure, 109 00:06:44,120 --> 00:06:48,520 Speaker 2: and that for investment in infrastructure, exactly as we were 110 00:06:48,560 --> 00:06:53,040 Speaker 2: explaining this morning, you need scale. Europe is also rethinking 111 00:06:53,200 --> 00:06:56,360 Speaker 2: about its position at this point. It's a critical year 112 00:06:56,480 --> 00:06:58,800 Speaker 2: with a new commission, and you may have seen there 113 00:06:58,800 --> 00:07:01,720 Speaker 2: have been reports like the Drug Report that have called 114 00:07:01,760 --> 00:07:06,320 Speaker 2: out the need for Europe to accelerate investment in infrastructure. 115 00:07:06,440 --> 00:07:09,080 Speaker 2: That's why the link that the CMA is doing today 116 00:07:09,120 --> 00:07:12,840 Speaker 2: between investment and competition and why investment is good for 117 00:07:13,000 --> 00:07:16,320 Speaker 2: customers and for competitors is so important. If you go 118 00:07:16,440 --> 00:07:20,560 Speaker 2: back eighteen months when we launched this project, I state 119 00:07:20,920 --> 00:07:24,760 Speaker 2: that it would be great for customers, great for competition 120 00:07:24,960 --> 00:07:28,280 Speaker 2: and great for the country. It's fantastic that we are 121 00:07:28,320 --> 00:07:32,200 Speaker 2: now in the position to make this reality for the UK. 122 00:07:32,560 --> 00:07:36,000 Speaker 2: I think other markets could take inspiration for this voter. 123 00:07:36,000 --> 00:07:38,880 Speaker 1: If I will have the majority stake fifty one percent. C. K. Hutchinson, 124 00:07:38,960 --> 00:07:41,360 Speaker 1: the owner of three, will have forty nine percent, We'll 125 00:07:41,400 --> 00:07:44,120 Speaker 1: see how long that last and whether you buy more 126 00:07:44,120 --> 00:07:46,240 Speaker 1: of that state maybe you can give a nod to that. 127 00:07:46,480 --> 00:07:48,760 Speaker 1: How do you do address that the national security concerns. 128 00:07:48,840 --> 00:07:51,360 Speaker 1: This is a Hong Kong based company. They have ties 129 00:07:51,400 --> 00:07:53,960 Speaker 1: to paging that the Hong Kong National Security Law that 130 00:07:54,200 --> 00:07:56,920 Speaker 1: compels C. K. Hutchinson at some point to pass on 131 00:07:57,360 --> 00:08:00,360 Speaker 1: data from this entity to Hong Kong, Too Bay. How 132 00:08:00,360 --> 00:08:01,040 Speaker 1: do you mitigate that? 133 00:08:01,240 --> 00:08:03,520 Speaker 2: First of all, let me say as you mentioned that 134 00:08:04,080 --> 00:08:08,840 Speaker 2: Vodafon will be in the driving seat of the new company. Second, 135 00:08:09,280 --> 00:08:12,200 Speaker 2: our partners, which as you say, are based in Hong Kong, 136 00:08:12,280 --> 00:08:15,720 Speaker 2: have been operating telecom infrastructure in the UK for over 137 00:08:15,800 --> 00:08:18,920 Speaker 2: twenty years and are involved in a range of sectors 138 00:08:18,960 --> 00:08:22,760 Speaker 2: in this country. As you would expect, we have absolutely 139 00:08:23,120 --> 00:08:28,320 Speaker 2: made ourselves comfortable that our partners have been respecting all 140 00:08:28,360 --> 00:08:32,040 Speaker 2: applicable rules and regulations. But besides what we can say, 141 00:08:32,280 --> 00:08:36,400 Speaker 2: all authorities and regulators in the UK have gone through 142 00:08:36,440 --> 00:08:39,640 Speaker 2: a very thorough analysis and have confirmed now months ago, 143 00:08:39,840 --> 00:08:41,839 Speaker 2: their approval to this initiative.