Virgin Media news: what you need to know about O2 linkup

O2 and Virgin Media merger

The two media and telecoms titans are set to merge and go head-to-head with BT in a landmark deal for the industry. We round up the latest O2 and Virgin Media news and explain how you could benefit.

The owners of TV, telephone and internet provider Virgin Media and the UK’s largest mobile network operator O2 have announced a £31 billion deal to join forces, in a blow to BT and Sky.

The 50-50 joint venture deal between Liberty Global, which owns Virgin Media, and O2 owner Telefonica is set to transform telecoms, with the combined company becoming the largest mobile and internet provider in the UK.

The new media and mobile titan will bring together O2’s 34 million mobile customers with Virgin Media’s 5.3 million broadband, TV and mobile users. In addition to its own customers, O2 provides the network infrastructure for Giffgaff, Tesco Mobile and Sky Mobile.

Announcing this exciting O2 and Virgin media news agreement, Mike Fries, Chief Executive Officer of Liberty Global, said, “We couldn’t be more excited about this combination. With Virgin Media and O2 together, the future of convergence is here today. We’re committed to this market and are right behind the Government’s digital and connectivity goals.”

“Both Liberty and Telefonica have seen the undeniable benefits of fixed mobile convergence across Europe and one thing I can promise you is that consumers always win, with better services, better innovation and better value.”

Meanwhile, Telefonica Chief Executive Officer, Jose Maria Alvarez-Pallete, said, “Combining O2’s number one mobile business with Virgin Media’s superfast broadband network and entertainment services will be a game-changer in the UK, at a time when demand for connectivity has never been greater or more critical.”

“We are creating a strong competitor with significant scale and financial strength to invest in UK digital infrastructure and give millions of consumer, business and public sector customers more choice and value.”

The O2 and Virgin Media news follow the trend of specialised businesses coming together to offer complementary services and bundles, as seen with BT’s £12.5 billion buyout of EE’s 27 million customers in 2016.

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O2 and Virgin Media - a done deal?

As with all deals of this manner, the O2 and Virgin Media linkup is subject to regulatory approval and is not expected to close until midway through next year. Although a previous merger of O2 and Three was blocked in 2015, this was because it would have skewed competition, leaving just three major mobile networks left in the UK.

This new deal is unlikely to fall through, based on the Competition and Markets Authority (CMA) sanctioning of the BT and EE linkup. However, some feel the merger should be kept under observation even once it gets the go-ahead, with neither provider having scored particularly high when it comes to customer satisfaction in recent years.

Rocio Concha, Chief Economist at consumer choice website Which?, said, “The proposed merger of two of the biggest players in the telecoms industry could have a significant impact on consumers, so the competition regulator should investigate closely.”

“Neither provider stands out in our recent customer satisfaction surveys, and any merger should only be allowed to go ahead if it delivers positive outcomes for consumers.”

What does this mean for customers?

TV, internet and mobile bundle

As the O2 and Virgin Media linkup is yet to get the green light and won’t be finalised until next year at the earliest, customers are unlikely to see an immediate impact.

However, convergence deals do often lead to lower bills, with companies offering discounts for buying your mobile contract and home broadband packages in a bundle from the same supplier. Whether that’s under a new name or the O2 and Virgin Media brands remain separate is yet to be seen.

What we could potentially see is O2 offering broadband and television services using the Virgin Media network. This would leave Three as the only major UK mobile network unable to offer a fixed broadband service to its customers.

The joint O2 and Virgin Media news will also help to keep the 5G rollout on track. O2 was the last of the major networks to introduce 5G, in October 2019, while Virgin Mobile has not been able to offer it at all until now.

Now available in 30 towns and cities across the UK, O2’s 5G coverage still lags some way behind EE and Three, which have connected 71 and 68 towns and cities respectively. O2 is betting on using Virgin Media’s fibre broadband network to increase this number and overtake its competitors.

Whatever happens, with the new joint venture set to go head-to-head with current market leader BT, customers across the board could well see more competitive prices and better service as the suppliers battle it out to increase their market share.

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