As part of a new package designed to boost its telecoms sector, the UK government indicated it would be just fine with a spot of MNO consolidation.

Scott Bicheno

April 11, 2023

4 Min Read
UK government gives telecoms sector buying signal over mega-mergers

As part of a new package designed to boost its telecoms sector, the UK government indicated it would be just fine with a spot of MNO consolidation.

The headline news, as far as the government is concerned, is that it’s providing up to £148 million of public money to ‘boost UK’s digital connectivity’. This is comprised of ‘up to’ £100 million for 6G research, £40 million to ‘promote investment and adoption of 5G by businesses and public services’, and £8 million to help connect some remote locations to satellite broadband.

But the potentially most juicy part of the announcement is contained in the following paragraph: “To help the mass adoption of 5G across the country, the strategy sets out a clear pro-investment framework for mobile network operators by driving down deployment costs and improving demand. The Government has also reconfirmed that there is no ‘magic number’ of mobile operators, whilst noting all decisions on consolidation are for the Competition and Markets Authority.”

There was no reason for this announcement to make any mention of the number of MNOs, let alone a ‘magic’ one. That can only be in reference to the apparent informal rule that there needs to be at least four MNOs in a given market, to ensure healthy competition. Furthermore, since there is no legal obstacle to an increase in that number, the clear signal is that if the UK were to move from four to three, the government might be just fine with that.

Specifically the government is indirectly referring to the potential merger of the UK arms of Vodafone and Three, which they publicly admitted to discussing last October. The lobbying in favour of consolidation has ramped since then, not least from Three, and even the EU seems to be warming to the prospect of lowering that magic number. While stressing the independence of the CMA, the government seems to be giving it a strong steer nonetheless.

“Our Wireless Infrastructure Strategy sets out our plan to ensure everyone, no matter where they live, can reap the benefits of improved connectivity,” said Technology Secretary Michelle Donelan. “We are doing this by ensuring all populated areas in the UK will be served by what I call ‘5G-plus’ technology by 2030. We are also committing £8m to provide satellite connectivity for our most remote communities so that no one is left behind.

“We are also supporting long term economic growth in the UK with a £40m fund to encourage innovative 5G investment across the private and public sector. This will help industries transform at a time when the ways we communicate, work and do business are on the precipice of significant evolution.

“This package of measures turbocharges our progress towards becoming a science and tech superpower with a substantial initial investment in the future of telecoms. We want to ensure that 6G is developed to meet the needs of people and businesses right across the UK and bolster our international competitiveness throughout the economy.”

To clarify, 5G-plus refers to standalone 5G and right now that 2030 target is merely an ‘ambition’ with no stated incentives or sanctions associated with it. Precisely how the newly-announced cash will be spent has yet to be determined, but the government has published a fairly comprehensive document detailing its ‘Wireless Infrastructure Strategy’.

To coincide with the unveiling of this new cunning plan, partly UK state-owned LEO satellite player OneWeb announced it’s getting at least some of the remote connectivity cash. Partnering with BT and Clarus, trails will take place in the Shetland Islands (pictured) and on Lundy Island, near the north Devon coast.

“We are excited to demonstrate the impact of LEO connectivity through these trials,” said Neil Masterson, CEO of OneWeb. “From the beginning, OneWeb’s mission has been to bridge the digital divide for communities, but there are still countries around the world where reliable access to connectivity is unattainable. Working with the government, alongside our trusted partners and customers, OneWeb can help to bring connectivity to the communities and businesses that need it most, in underserved regions in the UK and around the world.”

While it obviously remains to be seen how well this money will be spent, we have to give credit to the government for consistent efforts to support the UK telecoms sector. In the strategy document, its ‘openness to market consolidation’ is once more stressed under the broader heading of ‘strengthening the investment climate’, so it seems that the odds of Vodafone being allowed to merge with Three got a lot better today.


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About the Author(s)

Scott Bicheno

As the Editorial Director of, Scott oversees all editorial activity on the site and also manages the Intelligence arm, which focuses on analysis and bespoke content.
Scott has been covering the mobile phone and broader technology industries for over ten years. Prior to Scott was the primary smartphone specialist at industry analyst Strategy Analytics’. Before that Scott was a technology journalist, covering the PC and telecoms sectors from a business perspective.
Follow him @scottbicheno

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