Speaker 1: Margaret to the deal has been approved. The merger has
Speaker 1: been approved. Man. We will take that as validation of
Speaker 1: your strategy. What does it mean for the outlook for
Speaker 1: Vodaphone in the years ahead.
Speaker 2: Let me first say Tom that today's announcement is great
Speaker 2: news for the UK because the CMA has given us
Speaker 2: screen light to create this new force in UK telecoms,
Speaker 2: a force that will increase competition and investment and ultimately
Speaker 2: give the UK the infrastructure that it truly deserves. For
Speaker 2: Vodafone specifically, it's the final move for us in reshaping
Speaker 2: Europe for growth. When I became CEO last year, I
Speaker 2: said that we were addressing three markets Italy, Spain and
Speaker 2: the UK. And we are now completing in this era
Speaker 2: of transition our strategy and we will look forward to
Speaker 2: next year in which you will see the new reshape
Speaker 2: Vodafon in Europe, geared for an acceleration of our growth and.
Speaker 1: You will be the biggest company, the biggest telecoms company
Speaker 1: in the UK by revenues. Give us a steer if
Speaker 1: you can, Margarita a ballpark figure in terms of what
Speaker 1: you think this does to the uplift for revenues for
Speaker 1: roaud Defone for twenty twenty five twenty twenty six.
Speaker 2: I would say Tom, this is not about revenues. The
Speaker 2: rationale of the merger is to unlock investment, infrastructure investment.
Speaker 2: With the combination between Vodafon Entry, we unlock scale in
Speaker 2: our networks, which is what will allow us to build
Speaker 2: the biggest, the best network in the UK, reaching ninety
Speaker 2: nine percent of the UK population. That's what we do
Speaker 2: for a living. We want to invest. We want to
Speaker 2: invest to give a better service to our customers and
Speaker 2: we want to invest to drive growth in our markets,
Speaker 2: which is where revenues come from. But the most important
Speaker 2: point for the financial set top of Vodafone is that
Speaker 2: all the markets in which Vodafone will operate next year,
Speaker 2: including the UK, will be growth markets where our own
Speaker 2: scale will allow us to drive growth with good returns.
Speaker 1: And you focused on that investment piece, eleven billion pounds
Speaker 1: of investment. When does that investment start, Margarita, and how
Speaker 1: will you be financing it?
Speaker 2: It starts as soon as we complete We still have
Speaker 2: a few weeks to go as we go apply the
Speaker 2: final legal touches with the CMA and our partners, we
Speaker 2: will complete in alf one twenty twenty five, and as
Speaker 2: soon as we complete, we will start investing, which is
Speaker 2: why although typically big infrastructure projects take time, our customers
Speaker 2: will already see the benefit into next year of a bigger,
Speaker 2: better broader network. In terms of funding, you know that
Speaker 2: the other activity we have done this year as part
Speaker 2: of the reshaping of Vodafone in Europe is to reshape
Speaker 2: our balancee. So we have all the funding we need
Speaker 2: to execute on our plan.
Speaker 1: Okay, so you fund it from the balance sheet. You
Speaker 1: have the funding that you need. The deal closes in
Speaker 1: the first half of next year, that's the expectation. What
Speaker 1: is the timeframe for the integration between the two businesses
Speaker 1: and what kind of cuts maybe you might be looking
Speaker 1: at in terms of efficiencies between the two businesses.
Speaker 2: Sure, it's clearly early days to talk about this because
Speaker 2: the two companies won't be allowed to operate together and
Speaker 2: therefore design the full detailed integration plan until we complete
Speaker 2: in the first half of twenty twenty five. But specifically
Speaker 2: on the points of jobs, let me be very clear.
Speaker 2: This merger, as we've just discussed, is about investment, is
Speaker 2: not about cost cutting. What that means is that of course,
Speaker 2: with an eleven billion investment plan, thousands of jobs will
Speaker 2: be created, and more broadly, outside of the telecom ecosystem,
Speaker 2: you will have businesses across the UK that will get
Speaker 2: the benefits of a better network for their own growth.
Speaker 2: Of course, as always as we combine two companies, there
Speaker 2: will be areas of overlap, but the net result of
Speaker 2: the merger is going to be an increasing employment across
Speaker 2: the UK.
Speaker 1: Okay, but specifically for Vodaphone. As you look for those synergies,
Speaker 1: but also that investment, what does that do for headcount
Speaker 1: in the years ahead.
Speaker 2: This is something we will be working on with our
Speaker 2: partners as soon as we are allowed to complete. In
Speaker 2: the grand scheme of think think about it as small
Speaker 2: as the impact of the merger. Of course, to give
Speaker 2: you an example, there will be duplication in the heads offices,
Speaker 2: but they have nothing in comparis reason to the investment
Speaker 2: plan that we have in mind.
Speaker 1: What will it mean? Critics of course have suggested it's
Speaker 1: going to mean higher prices for customers. Mobile prices will
Speaker 1: be capped for three years as a result of this
Speaker 1: deal with the CMA and this merger, but post that
Speaker 1: three year period, the prices go up for consumers.
Speaker 2: This is a really important point you are raising because
Speaker 2: the CMA is really establishing here a very important point.
Speaker 2: They have established the link that we all know exists
Speaker 2: between investment and competition. What that means is that more
Speaker 2: investment will drive more competition on investment itself across all
Speaker 2: players in the UK, which will be good for customers.
Speaker 2: But also with a bigger a better network, we will
Speaker 2: have more capacity that will mean more competition on the
Speaker 2: retail front. Let me remind you that in the UK
Speaker 2: market we are in one of the most competitive retail
Speaker 2: market across Europe. We have tens of brands competing for customers.
Speaker 2: That is not going to change. What is going to
Speaker 2: change is now these retail brands will have a much
Speaker 2: better infrastructure to support them.
Speaker 1: Margritter, you've pointed to the key markets outside of the UK,
Speaker 1: Italy and Spain. Do you expect this deal to be
Speaker 1: a catalyst for consolidation, further consolidation in the European market?
Speaker 1: And what do you say to governments in Europe, some
Speaker 1: of them who are reluctant and are cautious about consolidation, this.
Speaker 2: Deal could represent a good precedent for the rest of Europe.
Speaker 2: I think all governments are now aware of the fact
Speaker 2: that Europe is falling behind in terms of its technology infrastructure,
Speaker 2: and that for investment in infrastructure, exactly as we were
Speaker 2: explaining this morning, you need scale. Europe is also rethinking
Speaker 2: about its position at this point. It's a critical year
Speaker 2: with a new commission, and you may have seen there
Speaker 2: have been reports like the Drug Report that have called
Speaker 2: out the need for Europe to accelerate investment in infrastructure.
Speaker 2: That's why the link that the CMA is doing today
Speaker 2: between investment and competition and why investment is good for
Speaker 2: customers and for competitors is so important. If you go
Speaker 2: back eighteen months when we launched this project, I state
Speaker 2: that it would be great for customers, great for competition
Speaker 2: and great for the country. It's fantastic that we are
Speaker 2: now in the position to make this reality for the UK.
Speaker 2: I think other markets could take inspiration for this voter.
Speaker 1: If I will have the majority stake fifty one percent. C. K. Hutchinson,
Speaker 1: the owner of three, will have forty nine percent, We'll
Speaker 1: see how long that last and whether you buy more
Speaker 1: of that state maybe you can give a nod to that.
Speaker 1: How do you do address that the national security concerns.
Speaker 1: This is a Hong Kong based company. They have ties
Speaker 1: to paging that the Hong Kong National Security Law that
Speaker 1: compels C. K. Hutchinson at some point to pass on
Speaker 1: data from this entity to Hong Kong, Too Bay. How
Speaker 1: do you mitigate that?
Speaker 2: First of all, let me say as you mentioned that
Speaker 2: Vodafon will be in the driving seat of the new company. Second,
Speaker 2: our partners, which as you say, are based in Hong Kong,
Speaker 2: have been operating telecom infrastructure in the UK for over
Speaker 2: twenty years and are involved in a range of sectors
Speaker 2: in this country. As you would expect, we have absolutely
Speaker 2: made ourselves comfortable that our partners have been respecting all
Speaker 2: applicable rules and regulations. But besides what we can say,
Speaker 2: all authorities and regulators in the UK have gone through
Speaker 2: a very thorough analysis and have confirmed now months ago,
Speaker 2: their approval to this initiative.