Comms giant Telefonica confirms O2 in talks to merge with Virgin Media

It's official: mobile networks operator O2 is negotiating a merger with Virgin Media. Should the deal — details of which are not yet known — complete, it would see the creation of the UK's largest entertainment and telco provider, spanning mobile, fixed-line telecommunications, broadband, and pay TV. O2 parent, Spanish comms …

[robidy]

Oh well, they both have annual increases in their fixed price deals...using "weasel worded" RPI excuses so the deal is not as good as it sounds.

Wonder if O2 will apply the "RPI" price increase just after the deal has started like Virgin does....to make the deal "appear" cheaper.

[lateworker]

Fools

You know what hacks me off about people who comment on things such as this, the complete lack of reading of the article or relevance to the article of the comments made...

To the "fool" who wrote about the RPI increase...RPI is increased annually in April once the ONS (office of national statistics) announces what the annual RPI level is, as such your increase is yearly and you'll know when it's going to occur as its is increased the same time every year.

[tip pc]

Re: Fools

“ To the "fool" who wrote about the RPI increase...RPI is increased annually in April once the ONS (office of national statistics) announces what the annual RPI level is, as such your increase is yearly and you'll know when it's going to occur as its is increased the same time every year.”

A few years ago there was no annual increase. You often got more airtime / texts / data I’m a new contract perhaps costing a little extra.

I was paying £12 a month on three for years, just got it down to £10 and it’s up to £11 again but I get 8GB now along with my unlimited calls and texts instead of the 2 then 4GB I was getting before.

[Martin Summers]

That will be interesting considering Vodafone were meant to be hosting the Virgin Mobile MVNO as of next year. I imagine there have been some worried phone calls and checking of contracts going on behind the scenes.

[Giles C]

Vodafone is moving into fixed line, in Peterborough they are partnered with city fibre to bringing a fibre link to every house.

Prices aren’t that bad either...

[IGotOut]

Vodafone have done business fixed network and phones for years....you may know them as Cable & wireless or Thus previously.

[Anonymous Coward]

Vodafone's fixed offering comes from the acquisition of Cable & Wireless, whose earlier Mercury division spent most of its time buying up little cable outfits and being creative with where they were running fiber (that said, that was really only London).

The good news was that it did give them fixed line access, the bad news was that the cable operators they bought had never heard of processes (cue a rather major collision of cultures :) ) so Mercury had a time where practically every process was broken.

On the plus side, if you were able to identify the right people you could actually get something done much quicker than normal, provided you planned ahead and sort of worked out your own process with the required business units.

That said, Vodafone most likely bought C&W for the same reason that C&W was pretty much forced to buy Energis after their management badly screwed up..

[Martin Summers]

Ah Mercury, I did extended work experience at their NOC at Small Heath in the mid 90's. Manager who was looking after me said he'd have offered me a job had I been old enough as I'd got a good grasp of PDH and SDH. Alas many years later and I wish I'd pursued that a bit more at the time as compared to the jobs I've done since it was a pretty cool place to work.

[Jan 0]

>Prices aren’t that bad either...

Maybe not, but you'd have to live in Peterborough. (A bland and soulless town, save for a few interesting shops with Asian owners, a maglev train and a shabby sculpture "park".)

[Steve Davies 3]

I hope OFCOM

step in to stop this.

IT will mean price rises all around for both sets of customers.

How much debt has VM got? How much has Liberty Global got?

Where is the financing coming from? More Debt? probably.

[Anonymous Coward]

Re: I hope OFCOM

Fire sale of a storm damaged island?

:)

[The Pi Man]

Re: I hope OFCOM

He’s already pawned that to save his airline?

[katrinab]

Re: I hope OFCOM

Beardy sold it to Liberty Global many years ago and just collects royalty cheques for the use of the Virgin brand.

[batfink]

Re: I hope OFCOM

Liberty Global are the biggest cable company in the world. The Liberty Group bought Formula One a few years ago out of its spare change. They created a European operation by simply strolling in and buying the largest local operators in a number of countries (including VM in the UK). They're also cash-rich at the moment, as they've just sold their Austrian, German and a few other countries' operations to Voda and T-Mobile.

I doubt debt is going to be a problem.

The Telco market is also very price-sensitive. "Price rises all round" would mean bleeding customers to the other players.

I don't see why Ofcom would object to this. VM and O2 are in different markets. VM is basically a cable company, with a small sideline in mobile. Virgin Mobile is just a virtual operator running on top of EE - it's not going to make a difference if it runs on top of O2 instead. O2 are a mobile company without a fixed-line operation, since they sold their fixed business to Sky (IIRC) some years ago. So, O2+VM gives a full-spectrum (hah!) offering. It's not going to reduce the number of players in either market, but it may of course make their offerings more attractive.

Personally, I would've liked BT to buy O2 back, thereby completing the circle...

[ElectricPics]

I've had my mobile with Cellnet/O2 for 20 years and found them no trouble at all, other than the recent in-contract price rise irritation. If a merger goes through and Virgin put their stamp on customer service takes over then my relationship with them will likely end.

[Cynical Pie]

As a VM customer for Mobile and Tv/Broadband/Fixed Line their Mobile Customer Service isn't too bad, certainly no worse than any of the other providers all of whom I have been with over the years.

Less said about their TV etc side of the biz although on the one occasion we had a problem it was sorted reasonably quickly and we received compensation for a loss of service. Still a nightmare trying to speak to anyone though

[mark l 2]

I wonder if the merger would mean another rebranding for Virgin Media? Although I don't have VM services any more I was a long time customer and started off with when they were Nynex, then a rebrand to Cable and Wireless, then NTL and finally Virgin Media.

In regards to the other mobile operators without any fixed line offerings, I think they were banking on 5G offerings being good enough to tempt customers from their fixed line onto a mobile only internet. But first with concern on whether UK telcos were going to be able to use Huawei kit on the UK networks and then COVID19 coming along I suspect its going to set back widespread 5G take up.

[Doctor Syntax]

"and then COVID19 coming along I suspect its going to set back widespread 5G take up"

With so much more business use shifting onto the net with working at home the 5G capacity might not be able to cope with a widespread take up.

[Doctor Syntax]

It's a times like this that I remember that the unfailingly stupid manglement of big BT* let O2 go. And that the price of BT's getting back into mobile when it became painfully obvious they should never have got out was to sell a chunk of itself to Deutsch Telekom.

* Big BT was the usual term used for the rest of the business in BT Mobile which became part of O2. It was never a term of endearment

[ARGO]

Let's see what OFCOM says

One of the grounds for stopping the O2-Three deal was the effect it would have on the MVNO market.

I'm looking forward to hearing them explain how this deal - bringing together the first and second largest MVNOs - will have no effect.

[batfink]

Re: Let's see what OFCOM says

You might be confusing MNOs (Mobile Network Operators) with MVNOs (Mobile virtual Network Operators).

O2 is an MNO - a provider of Mobile networks to MVNOs - Giffgaff, Tesco, couple of others. It's not an MVNO itself - it's the opposite. It was the same with Three, hence the issue there. MNOs are the ones with the physical gear.

Virgin Mobile is, however, an MVNO, and doesn't have any network of its own. Virgin Media is a cable company, not a mobile company.

So no, this isn't two MVNOs.

[ARGO]

Re: Let's see what OFCOM says

Nope I did mean MVNOs. O2 is both MNO and MVNO, Virgin is just MVNO

The largest MVNO is Tesco - 50% owned by O2.

The 2nd largest is Virgin, 100% owned by Virgin Media.

Giffgaff is 100% owned by O2, but I believe they are outside the top 5 these days.

[EnviableOne]

S2D2

Telefonica have been looking to offload O2 for years, and Liberty look to be a good fit, it would give them a proper quad threat package with their own physical network, that would compete with BT/EE/Plusnet and increase their subscriber count while decreasing the cost base for existing VM mobile customers.

Beardy only has about a 2% stake in VM, just so liberty can continue to use the name.

the three deal was struck down as it would have left only 3 MNOs instead of 4, nothing to do with the MVNO market. to be fair the BT aquisition of EE was a far greater threat to competition.

[Anonymous Coward]

Re: S2D2

>nothing to do with the MVNO market

See clauses 3137 - 3148 in the Commission ruling:

https://ec.europa.eu/competition/mergers/cases/decisions/m7612_6555_3.pdf

(that's the decision section - there's also reams of stuff earlier on)

They had big concerns about the level of competition possible in the MVNO market if that deal went through.