Two of Britain’s biggest mobile phone companies could merge by the end of the year

Vodofone and Three Mobile have sped up talks about a new deal to combine their operations, creating the biggest player in the phone industry.

According to industry sources, an agreement could be made by the end of the year.

Three is currently part of CK Hutchison group of companies which has mobile operations in 11 countries.

The Hong-Kong based umbrella company has been looking to sell Three for some time. It is believed that a deal with Vodafone is Three’s best chance to participate in market consolidation.

Insiders told Sky News on Monday that talks for a merger were now at a “relatively advanced” stage however, there were still many obstacles to come and there was no certainty that a deal would be made.

A deal would create a market-leading business with some 27 million customer connections – making it larger than Virgin Media O2 and BT Group’s (BT.L) EE, Sky added.

Shares in Vodafone jumped after the report and were up two per cent at 103.16 pence by 0950 GMT, compared with a 0.8 per cent fall in the FTSE 100.

Vodafone Chief Executive Nick Read had said in February the company was pursuing mergers with rivals in multiple European markets, spurred on by more favourable signals from regulators who have realised the value of network investment during the COVID-19 pandemic

More to follow…