Three and Vodafone: Potential Merger

Debate between Navendu Mishra and Chris Loder

Thursday 14th December 2023 Commons Chamber

[Chris Loder (West Dorset) (Con)]

It is a pleasure to be called in this debate. How pleased I am to follow the right hon. Member for Birmingham, Hodge Hill (Liam Byrne). I offer my belated congratulations on his appointment to the Business and Trade Committee and endorse his comments on the security nature of the potential effects on this country. However, my remarks will be channelled more to understanding the potential effect of the merger on our constituents and consumers. I particularly thank Which? and others for providing insights to my contribution to this debate.

Will this merger be good or bad for all of our constituents? That is the question to ask. It is very clear from the briefings that Vodafone and Three have offered that their core aim is to advance the roll-out of 5G, or at least that is what they say. Some of us in this House have been in two debates already this week about connectivity and the issues that we face across the United Kingdom, particularly in rural areas. We are asking ourselves whether we should be allowing the rigorous commercial pursuit of 5G, when there are some people in the country who are lucky to have 3G, let alone 4G. Should we be enabling and allowing enormous businesses that will become still larger to have free licence to forget rural parts of the country, in my case rural West Dorset?

There is such as a thing as the universal service obligation. It is meant to protect those who are in the worst possible situation with respect to connectivity. That, I am afraid to say, does not appear to be working, and we should ask ourselves why. Increasingly, it is my opinion that we have a weak and ineffective regulator that is not protecting the rights of consumers and residents. I find it incredible, for example, that the Vodafone map says that certain parishes and villages are covered with a mobile signal, when in actual fact they are not, and Ofcom, the regulator, does nothing about it. Because the map says that, it often obviates the need to provide connectivity for those people.

I emphasise the point that this merger will give a third of the UK market to one firm. That is absolutely incredible in this day and age, when we are clearly moving in a technological direction where new developments and innovations are key. The use of mobile phones—Androids and so on—is increasing, and the fact that we are, in effect, entrusting a third of the nation’s connectivity to one firm is questionable.

We need to understand some of the experiences that this nation has had so far with companies such as Vodafone. It is relatively common knowledge that there is a big question about Vodafone’s contribution—or, should I say, lack thereof—to the Exchequer. It pays, as far as I can see, no corporation tax for being a multibillion-pound organisation. In fairness, it will say that it invests a lot of money in infrastructure in the country, and I am not disputing that point. However, we should ask ourselves whether it is right to enable a business to enlarge still further when, I assume, it will continue to operate on the same guidelines, under which it pays little, if any, corporation tax. We should not think that this is new. From my research, I found that this situation first arose in 2012. This has already been going on for 11 years, and it is important that the House takes these matters into consideration as part of this debate.

The scale of investment that we have seen so far, as far as I can see, is frankly a bit of a joke. The investment that I have been told is forthcoming in my constituency is something that I just don’t see. Indeed, Vodafone itself had to apologise for basically misleading me and for guaranteeing that we would fix various connectivity issues in certain parts of my constituency. It is a real concern to me that we are in this situation, particularly when I want to research this matter and it always refers to the currency in euros rather than in pounds. I invite hon. Members to look on the Vodafone website to research this and understand it. It really does give me cause for concern.

[Navendu Mishra]

I am listening to the hon. Gentleman’s contribution with great interest. He made a point earlier about misleading information. The House has been told that the primary function of this merger is to increase investment in infrastructure in the UK. Does he agree that the primary function of this merger is pure profit—it is basically corporate greed?

[Chris Loder]

I thank the hon. Member for his kind intervention. He almost takes the words out of my mouth, as I go on to the next part of my speech.

The case that is being put, as I understand it from the brief received from both Vodafone and Three, is that the merger will support increasing amounts of investment. They go on to say further that the merger will generate £700 million of savings. When we start to unpack it, what we are actually dealing with here is massive job cuts. We expect to see up to 1,600 people lose their jobs in the United Kingdom alone. The right hon. Member for Birmingham, Hodge Hill mentioned that, but what he failed to include in his remarks is that a programme of 11,000 job cuts is already going on globally within Vodafone. While I am not the biggest advocate or supporter of Unite the union, I can well understand and agree with the point that the hon. Member for Stockport (Navendu Mishra) makes.

I will progress my remarks to talk about the effect on the consumer in respect of prices and mobile phone bills. It is right that we consider what has happened in the past few years in Australia, where Vodafone has undertaken a merger with TPG. The Australian Competition and Consumer Commission report showed that Australian prices all rose and that investment fell. I understand that the rise in prices is contested by some operators, but I could not find it contested that investment fell—and not just by a little bit, but by 45%. That is a considerable amount, and it gives me cause for concern when looking at this situation. We have to ask ourselves: to what extent do we believe what we are being presented with? That gives me even greater concern when I consider the national security matters that the right hon. Member for Birmingham, Hodge Hill raised.

My constituency of West Dorset has 400 square miles and 132 parishes, and we have ropey coverage, to say the least. I have had to look in the mirror and ask myself, “Will this merger help the 82,000 constituents who depend on mobile connectivity increasingly every day?” Some 97% of the businesses in West Dorset are small or micro-sized. They do not have enormous amounts of cash to put in substantial investment, so that question is important.

For me, given what I have seen so far, it comes down to a question of trust. That is why I have a slight problem with what is being presented to us. Vodafone’s coverage map for my constituency is wrong. I have contested it, and I have gone to the regulator about it. Vodafone says that most parts of rural West Dorset have a signal. I am sorry, but the places that it indicates do have signal do not. That shows how weak the regulator Ofcom is in dealing with this issue. It is allowing operators to get away scot-free under the guise of a universal service obligation that is not delivering what is necessary for those people. We find it not just once or twice, but time and time again.

I went to visit the small village of Stoke Abbott, which is on the outskirts of the beautiful town of Beaminster, earlier in the year. I was pleased—it was somewhat surprising, I thought—to have secured a number of commitments to improve that village’s appalling level of connectivity. Regrettably, Vodafone had to correct itself, because it had misled me. It would no longer continue those improvements, and it went on to say that it believed that the problems would be solved by improved 4G coverage. Well, I am afraid that those improvements have not happened to date. As I said, this comes down to trust. Vodafone did apologise for its somewhat disingenuous statements, but that shows what we are dealing with here, and it also exposes the weakness of the regulator in addressing these issues in a meaningful way.

Given my personal experience of the organisation and how it treats my constituents, why would we want to afford it the ability to become larger and more dominant in the market? In my opinion, it has such a bad record of customer service to local people. I do not know if anyone else here has the joy of being a Vodafone customer, as I do. Its customer service hotline is known as 191. If I ring that number, it is virtually impossible to speak to someone to get help. Many of my constituents have had the same experience. It is just incredible that, if they are fortunate enough to get through to someone who can help them, they are directed to what they call the director’s office, which is just a shambles. It takes months to resolve the slightest difficulty. The situation that I outlined earlier, whereby coverage is not as some say it is, is appalling.

One of my fine constituents from Maiden Newton got in touch with me only a few days ago to share her experience. In fairness to Vodafone, she is a customer of Three, which, by and large, provides its customers with a reasonable service. My constituent put it well in her email:

“How can we level up as a rural community when it’s hard to tune in to digital radio or make a phone call? As a small business owner I often have to do business on the move, but find I can’t access anything as the signal is too poor.”

She goes on to say that, clearly, something has happened in the last six months. The network provider had told her that work needed to be done on a mast in the area, but that still has not been sorted. These issues just go on and on.

I was grateful to Three and Vodafone for providing me with the briefing. I thought it was reasonably interesting, but I was looking for the word “customer” in there, and I could not see it once. If anybody else was able to find it, I will stand corrected, and I may need to get my eyes tested again. That indicates to me the real drive behind the merger. The briefing that we have been provided with, for which I am grateful, shows what this is about.