Now that the Competition and Markets Authority (CMA) has given the go ahead for the Vodafone Three JV, and a leadership team has been appointed, it’s time to brace yourself for a new world of mobile in the UK. 

Over the next 12-18 months we’ll start to see some significant changes shake out. Expect to see a review of the brands as a starter.

If you dare place bets, then I would consider the dissolution of the Three brand in favor of Vodafone. It’s hard to think that the brand launched to disrupt the market could be closed but that’s the potential reality of a merger of this size and one that’s weighted in favor of Vodafone. And given the Vodafone brand was recently named as the UK’s most valuable brand worth $32.6bn, there’s a strong argument that it remains the ‘main’ brand.

We should also anticipate a review of the sub-brands – Talkmobile, Voxi, and Smarty. There isn’t room for them all, simply because they are all built to compete with one another. Which ones will go remains to be seen, but I would be surprised if they are all retained in the long-term.

Network perception and unbelievable deals

We’ll see some of the biggest changes in the wider market as other operators and MVNOs (Mobile Virtual Network Operator) respond.

But let’s pause for a moment to consider how the hotly fought contest of who has the best network will shape up. 

O2 will finally have its day. Its network quality will get a boost when it can take advantage of the spectrum the merge co is obliged to sell it. (This forms part of the commercial deal that lets Three join the Vodafone and O2 site-sharing scheme ‘Beacon’.)

Then there are the ramifications the merge co will have once it has fully integrated the assets. It’s hard to imagine the sheer scale of the network but the merged entity will have 40 percent more cell sites. It means BT will lose its ‘best network’ accolades – it simply won’t have parity. 

In the long term, it’s clear that JV customers will get better coverage but merging networks is no mean feat. Any connection wobbles could prompt consumers to switch from the JV to a more stable provider. After all, why wait for inevitable outages?

Perceptions of network performance take years to establish and to change. So, if I were BT, I’d be putting huge energy into shouting about network reliability and coverage as part of a customer retention plan. 

I’m sure BT will dial up acquisition offers and marketing in the hope that customers impacted by any (inevitable) integration outages see a viable and enticing deal from BT. In the short term, this could drive growth. Consumers ready for a change could be persuaded, especially if they can be convinced on network and coverage. 

We should also consider the MVNOs hosted by O2. They will be keen to benefit from the improved O2 spectrum so they can deliver a better customer experience overall. Ultimately, every provider will try and win more than their fair share at a time when the merge co is distracted with integration.

Winning share will take a few forms. There’s the expected hunt for consumers who want low-cost SIMO, and, as we head towards summer, roaming and eSIM travel offers will become a big battle ground.

Expect business to be a battleground too

Business customers have hardly been mentioned in the CMA judgments, but it seems likely that Vodafone, with a significant business base, will want to curb the aggression of Three Business, which has been dramatically growing share through flexible and cheap offers for SMEs. 

Given the JV must firstly deliver retail and wholesale price caps and publish reference pricing in line with the CMA judgment, and secondly, be seen as ‘pro’ MVNOs, there’s a big opportunity for the MVNOs addressing the business market. 

Let’s face it, Three’s Business unit is a challenger brand. There’ll be a desire from Vodafone to dial this down. However, in doing so, new MVNOs could take the chance to swoop in to steal share.

Depending on where the reference offers finally land, the right MVNOs, both new and existing, should be able to negotiate some great deals to leverage the spare capacity in the merged company.

Renegotiating terms will be disruptive

We have seen indications of a more open approach to MVNOs from Vodafone in two recent launches of MVNAs (Mobile Virtual Network Aggregator) – eSIMGo and Gigs. Both were announced late last year, and I suspect they will be incentivized with both carrot and stick to launch MVNOs to help drive wholesale revenues and the visible proof that Vodafone is ‘MVNO friendly’. (From now on, there will be an emphasis on making sure the deals done show Vodafone is on the side of MVNOs, as per CMA requirements.)

But the reality is, that any well-run MVNO should be renegotiating terms. The CMA remedies are an inflection point where all MVNOs can look again at their rates and, if what they currently have is not as good as the reference offers, bring their MNO back to the negotiating table.

Existing Vodafone MVNOs or those joining will get rates that are held for three years after the merger date. It’s good news for the consumer, as this should result in more MVNOs driving harder on low-cost tariffs.

Bear in mind, if an MVNO were to move from either O2 or BT, then the ripples would be far-reaching. BT also has the additional complication that Lycamobile (its biggest MVNO) is refocusing its strategy and downsizing.

New launches

There will be a deluge of new launches. We are already seeing Gigs and ESIMGo jump into action, ready to set up any brand that wants to run an MVNO. Not only that, but the new MVNAs on Vodafone will have every reason to push hard to deliver new MVNOs to market. 

Banks, retailers, travel companies, airlines, and even online influencers will launch their own mobile brands before we know it. The technology to launch 100 percent digital brands will help make the business case more compelling than ever. 

All of this adds up to a better deal for consumers, which is exactly how the JV will have been appraised – aside from delivering world-class network coverage. The key will be to deliver real differentiation and make a loud splash, whilst the Vodafone and Three teams are distracted by the gargantuan job of consolidation.