VODAFONETHREE MERGER ⫶ A CLEAR RATIONALE
A
Sub-scale UK retail mobile market
Low returns
Ofcom’s Return on Capital Employed (ROCE) estimates 2
Share of consumer subscribers (Q4 FY25) 1
20.0%
20.4%
27%
BTEE
17.6%
Sub-scale
23%
22%
13.3%
13.9%
Two smallest operators
13.8%
Impacting our ability to invest & compete
VMO2
Low ROCE %
15%
Impacting customer experience
13%
9.1%
9.1%
Cost of capital MCT
7.8%
4.2%
3.1%
Limited investment
2.1%
0.9%
1.1%
0.8%
VMO2
BTEE
Sky Mobile, Tesco Mobile & Other MVNOs
2019
2020
2021
1. External company reports 2. Ofcom Future Approach to Mobile Market. The cost of capital (pre-tax nominal) comes from Ofcom’s charge control decisions for mobile call termination (MCT) over the relevant period. A lack of scale and returns limited both businesses ability to invest and compete effectively 60
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