Three has once again reiterated its calls for consolidation in the UK mobile market, calling the current situation “dysfunctional”.

The company recorded its strongest year in terms of customer additions for nearly a decade in 2021, with a 7% rise in its active contract base, coupled with growth in the business and home broadband markets, contributing to a 4% rise in revenues to £2.44 billion.

Meanwhile, profitability increased by 10% year-on-year and the company’s 5G network now covers one third of the UK population across 2,500 sites.

Vodafone vs Three

However, Three has warned that future investment is being stifled by intense competition among four operators in a mature market. It argues that this need to compete is draining capital that could be used to improve the reach and quality of 5G networks.

Market consolidation has been a long-term ambition for the sector, with operators arguing that this would help cut costs and fund investments in full fibre and 5G infrastructure. However, UK regulators have traditionally been eager to maintain the status quo of four operators.

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Three has repeatedly expressed its dissatisfaction with this current scenario and has urged governments and regulators to adopt an open mind when it comes to mergers and partnerships. In 2016, a proposed combination with O2 was blocked by regulators and amid speculation of a potential tie up with Vodafone is eager to avoid a repeat.

The signs suggest, however, that regulators and government would be more tolerant now than five years ago of such a transaction owing to the increased importance of connectivity in society and the status of 5G as a vehicle for economic and societal gain.

“I am really pleased with this set of results which have delivered our strongest customer contract growth since 2012,” said Robert Finnegan, Three UK CEO. “We are also seeing strong performance in new areas of our business including SMARTY, B2B and Home Broadband.

“The foundations of this are the enhancements to our network with 5G now covering more than a third of the UK’s population … These enhancements are being supported by our highest ever levels of investment and are testament to the hard work of our staff and their efforts throughout a challenging 2021.

“However, the UK market with 4 operators continues to remain dysfunctional and requires a structural change to improve the overall quality of infrastructure that UK customers should expect.”