VodafoneThree accelerates cost cutting to reach £1bn by 2032

Mobile phone giant VodafoneThree has revealed plans to ramp up cost cutting in the UK to £1 billion by 2032 as it continues to make savings after last year’s mega merger.

Vodafone’s UK business, which became VodafoneThree after merging with Three UK in 2025 to create a firm valued at nearly £14 billion including debts, has earmarked another £300 million of annual cost cuts on top of the original £700 million-a-year target.

It insisted the extra savings would not impact its workforce.

Mobile phone giant VodafoneThree has revealed plans to ramp up cost cutting in the UK to £1 billion by 2032 as it continues to make savings after last year’s mega merger.

The costs are set to come from moves to cut down its network of mobile phone masts and towers, which it plans to reduce from around 37,000 to about 26,000, as some Vodafone and Three UK sites are located close by.

It is also stripping out some costs due to full group ownership where there is unnecessary duplication, with Vodafone having in July bought out the 49% stake held by former partner CK Hutchison Group Telecom Holding for £4.3 billion.

Margherita Della Valle, group chief executive of Vodafone, said: “We created VodafoneThree because we saw the opportunity to transform the UK market – to create the scale to invest, to deliver a step change in network quality and customer experience across every region of the UK and to build a stronger business, creating sustainable long-term value.

“After a strong start, we now have even greater confidence in the opportunity ahead.

“That’s why we are upgrading our cost target to £1 billion, with VodafoneThree set to become an increasingly important contributor to Vodafone’s growth ambitions.”

The group said it would increase annual savings to £800 million by 2029-2030 and £1 billion by 2031-32.

Since completing the merger of Vodafone and Three in the UK, the company has been working to integrate the two brands, including sharing their 5G networks.

VodafoneThree became the UK’s largest mobile operator following the deal and is one of the country’s fastest-growing broadband providers.

It had about 27 million customers after combining, but up to 50 million people in the UK have access to its 5G speeds thanks to the combined spectrum.

In an update to investors on Thursday, Vodafone said it was now setting its sights on achieving underlying earnings growth in the mid-to-high single percentage digits annually between 2024-2025 and 2031-2032.

It also aims to more than triple operating free cash flow at VodafoneThree by 2031-2032 relative, compared with 2024-25.