Vodafone UK’s mobile contract customer base decreased by 73,000 during the third quarter of its financial year. The decline followed a company decision to disconnect thousands of low-value business SIM cards. The period covered the months following the completion of Vodafone’s merger with Three UK on May 31, 2025.
The newly combined VodafoneThree entity now serves more than 28 million customers, making it the largest mobile network operator in the United Kingdom. The company stated that integration has progressed quickly, with spectrum and network sharing already activated for 28.6 million customers who can now seamlessly use both networks.
Financial Performance and Revenue Trends
Vodafone reported that its UK mobile performance remained commercially resilient in the third quarter of FY26. However, underlying service revenue declined slightly due to tough prior-year comparisons and the after-effects of major business contracts.
The operator posted a 42.8 percent increase in mobile service revenue in the UK. This figure was driven primarily by the consolidation of Three UK’s financial results following the merger. On an organic basis, which excludes the merger impact, mobile service revenue fell by 1.8 percent. The company attributed this organic decline to strong comparative performance in both Business and Wholesale segments during the prior year.
Overall UK service revenue rose 31.1 percent to £1.72 billion. Total revenue climbed 30.9 percent to £2.12 billion. The company reiterated that the organic decline of 0.5 percent had been expected.
Sub-Brand Growth and Network Improvements
Despite the overall contract loss, Vodafone’s value-focused sub-brands, VOXI and SMARTY, added 38,000 customers in the third quarter. This signals continued momentum for the company’s value propositions.
The company has modernized over 8,000 radio sites and eliminated 16,500 square kilometers of partial coverage areas. Seven million Three and SMARTY users have seen their 4G speeds improve by up to 40 percent through the use of combined spectrum from the merged networks.
Multi-Brand Strategy and Business Segment
Vodafone is pursuing a multi-brand consumer strategy spanning its Vodafone, Three, VOXI, SMARTY, and Talkmobile brands. In November 2025, it launched the “Vodafone Together Family” proposition, which allows households to bundle mobile and broadband services with security features.
The quarter showed pressure in enterprise revenue. Vodafone Business service revenue fell 4.3 percent, or 5.4 percent on an organic basis. The company stated this drop was mainly due to a previously flagged one-off project booked in the prior year.
Convergence and Fixed-Line Growth
Although the focus remains on mobile, Vodafone pointed to strong broadband momentum as part of its convergence strategy. The operator added 64,000 broadband customers in the quarter and now has the capability to serve 22 million households with gigabit speeds. It also added 11,000 fixed wireless access customers, a figure reported within the mobile segment.
Integration Progress and Future Outlook
At a group level, Vodafone stated the UK integration is progressing well and firmly on track. This reinforces expectations that the combined business will help support delivery at the upper end of the company’s FY26 financial guidance. The UK now accounts for 23 percent of the group’s total service revenue, underlining its strategic importance.
Vodafone expects to continue extracting synergies from the merger while working to stabilize underlying organic growth. The scale benefits of the Three combination, alongside ongoing network improvements and brand-led customer strategies, are intended to position the company to compete more aggressively in the UK’s converged telecoms market. The company’s official guidance for the full fiscal year remains unchanged.
Source: Mobile News CWP
