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Union issues national security warning over Vodafone Three deal

Unite the Union has sounded the alarm over Vodafone and Three's proposed merger, claiming that it risks giving China access to sensitive UK government data.

Nick Wood

September 19, 2023

3 Min Read
Union issues national security warning over Vodafone Three deal

Unite the Union has sounded the alarm over Vodafone and Three’s proposed merger, claiming that it risks giving China access to sensitive UK government data.

While Vodafone has been busy espousing the purported benefitsthe merger will bring to the UK economy, Unite has been busy compiling a dossier detailing Three parent CK Group’s ties to Beijing, as well as its relationship with UK Prime Minister Rishi Sunak’s Conservative government.

The union, which represents 1.2 million workers in the manufacturing, construction, transport and logistics sectors – among others – also warned that the privacy of the merged entity’s 27 million customers is potentially at stake.

Unite asserts in the document (PDF) that senior CK Group executives sit on Chinese government committees and have access to the Chinese political elite. It also notes that the Li family, which controls CK, is a prominent supporter of Hong Kong’s pro-Beijing chief executive John Lee, and is in favour of the National Security Law (NSL), which gives police the power to monitor telecoms in Hong Kong.

In the UK, Three is not currently a public sector supplier, but Vodafone is. It counts the NHS, the Ministry of Justice and the Ministry of Defence among its government clients. Unite claims that the merger could give CK – and by extension Beijing – a window on sensitive government comms, regardless of any assurances to the contrary.

“Domestic laws and internal company policies will do little to hinder the exercise of nation-state intelligence gathering apparatus from leveraging any means of access to data that company mergers and acquisitions might enable,” warned technology policy advisor Dr Alexi Drew, in a research note for Unite in July. “If a merger creates the technical or human means to collect valuable data, then the security services of any nation-state, Chinese or otherwise, are likely to make use of it.”

Unite also offered up a timeline of meetings between CK execs – including chairman Victor Li and managing director Canning Fok – and UK government officials including the prime minister, in the run-up to the Vodafone-Three merger announcement.

It also drew attention to the fact that Conservative MPs Brandon Lewis and Chris Grayling have also done paid advisory work for other CK Group businesses.

In addition, Unite also raised concerns about the Investment Security Unit (ISU)’s review of the merger. The ISU was moved from the Department for Business, Energy and Industrial Strategy to the Cabinet Office supposedly to give the Prime Minister greater control over the process, but critics claim it helps the government avoid scrutiny.

Unite cited a recent report by the Intelligence and Security Committee, which said the decision to move the ISU is “of serious concern. Effective Parliamentary oversight is not some kind of ‘optional extra’ – it is a vital safeguard in any functioning Parliamentary democracy.”

While Unite doesn’t call for the merger to be blocked outright, it does describe it as dangerous, and calls for greater oversight.

“Rishi Sunak and his Conservative government claim to be willing to take robust action against Chinese threats to national security but when it comes to CK Group and this merger they’re rolling out the welcome mat,” said Unite executive head of operations Gail Cartmail, in a statement.

“Meetings with CK bosses here and overseas, Tory MPs on the company’s payroll, and a government desperate to avoid democratic scrutiny is a recipe for disaster,” she said. “Unite will continue fighting to ensure this dangerous merger faces the scrutiny it deserves.”

Irrespective of whether Unite’s concerns are warranted, it does seem odd that the UK can adopt such a hard line approach to Huawei while simultaneously appearing ambivalent towards CK Group potentially holding a 49% stake in Vodafone-Three.

Vodafone and Three will presumably play down the links to Beijing. Instead, they are likely to focus on the latter’s track record of reliably providing mobile services to UK consumers for the past 20 years without causing any major national security crises.

Nonetheless, until the government decides to show some leadership, this issue is likely to remain a thorn in Voda-Three’s side.

 

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About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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