When asked directly if the government was reviewing the deal under the National Security and Investment Act, the CEO of Vodafone Group Margherita Della Valle said: “Yes absolutely.”

The merger, which was announced last year, aims to create the UK’s largest mobile network, with more than 27 million customers. However, concerns have risen about Three’s parent company, CK Hutchison, which is based in Hong Kong and could potentially gain access to sensitive national infrastructure. 

China-skeptical Members of Parliament and union leaders voiced apprehensions about CK Hutchison’s perceived ties, and the owner Li Ka-shing’s alleged political alignment to the Chinese state. 

Della Valle said both companies had been subjected to strict protocol in terms of data protection law and telecoms security regulations, and according to her, the review was progressing as planned.

“I think it proves the rigorous protocols we are all under and constitutes a model that is applicable for different situations,” she added. 

Vodafone also stressed its majority ownership of 51% in the joint venture, with plans to gradually reduce the Chinese share over time, including its authority to appoint the chief executive.

The review also comes on the backdrop of another government intervention into Vodafone on national security grounds. Deputy Prime Minister Oliver Dowden flagged concerns regarding potential “material influence” by the United Arab Emirates after its state-controlled telecoms operator e& acquired a significant stake in Vodafone.

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Amid heightened concerns about foreign takeovers, particularly in sensitive sectors like telecoms, the UK government introduced the National Security and Investment Act, granting it broad powers to scrutinise such transactions.

In addition to the national security review, Vodafone’s merger with Three faces scrutiny on competition grounds. The Competition and Markets Authority (CMA) has initiated a phase one investigation to assess whether the merger might substantially lessen competition, potentially leading to increased consumer prices.