- The new network sharing agreement (the “Agreement”) significantly extends the current agreement between Vodafone UK Limited (“Vodafone UK”) and VMED O2 UK Limited (“Virgin Media O2”) for more than ten years;
- Subject to approval of the merger between Vodafone UK and Three UK (“MergeCo”) by the UK Competition and Markets Authority, the deal provides a stable basis for MergeCo’s expanded network to participate in the network sharing agreement and Virgin Media O2 will acquire the spectrum. from MergeCo;
- The deal and the creation of MergeCo will transform the experience of tens of millions of customers across the UK and (subject to CMA approval) will rebalance the mobile market by creating a third scaled network operator;
- The deal will extend the benefits of MergeCo’s £11 billion network investment commitment to Virgin Media O2 customers and the mobile virtual network operators (“MVNOs”) with whom they have a wholesale partnership; and
- The agreement and the formation of MergeCo will significantly enhance competition in the retail and wholesale mobile markets.
Vodafone UK and Virgin Media O2 have agreed to extend and enhance their existing mobile network sharing agreement for more than a decade, boosting quality mobile coverage across the country and providing better service to customers.
Many elements of the agreement extend the existing arrangement between Vodafone UK and Virgin Media O2 and are independent of the outcome of the merger between Vodafone UK and Three UK. However, once the merger is complete, the operators have agreed that Virgin Media O2 will acquire spectrum from the newly formed MergeCo, creating three scaled mobile network operators, each better aligned with spectrum holdings.
Combining MergeCo’s commitment to invest £11 billion in its network over the next decade (subject to CMA approval) and Virgin Media O2’s annual investment of £2 billion in its networks and services, the deal will deliver quality mobile connectivity, choice and competition. is improved. This will benefit not only the companies’ respective customers, but also businesses, including MVNOs, who use the networks through wholesale partnerships to provide their own mobile services to millions of people across the country. The deal will give these virtual operators access to a choice of three high-quality, scaled wholesale competitors and further boost the UK’s already thriving MVNO segment.
Ahmed Essam, CEO, European Markets, Vodafone said: “Through this deal and our merger with Three, we will transform the mobile experience for over 50 million UK customers over the long term, delivering significant network improvements including greater choice, better quality and greater coverage across the country. These benefits apply to both retail and wholesale MVNO customers. The proposed merger, together with this agreement, will strengthen competition by creating a strong third player in the UK mobile market and improve the balance of spectrum holdings, leveling the playing field between UK mobile operators.
Lutz Schüler, CEO of Virgin Media O2, said: “This new agreement with Vodafone ensures that the choice of quality mobile networks, performance, coverage and competition will improve for the benefit of millions of consumers, businesses and our mobile operator partners across the country. We are expanding and strengthening elements of our existing network sharing arrangement, while ensuring that there is a robust, balanced and functional structure in place for the long term should the proposed merger between Vodafone and Three be approved. We believe this new agreement addresses the issues we raised and the CMA outlined in its original decision, and we will now continue our engagement with the regulator in that spirit.
The deal includes plans by Virgin Media O2 to buy spectrum from MergeCo at market value, increasing their current stake. The deal reduces the current imbalance in spectrum holdings between UK mobile network operators, which will strengthen competition in the mobile market and enable MergeCo and Virgin Media O2 to deliver increased capacity, speeds and greater coverage to their customers.
Notes for editors
Any reference to MergeCo is subject to CMA approval.
The contract between Virgin Media O2 and Vodafone is subject to regulatory approval
- enhances the ability of MergeCo and Virgin Media O2 and virtual operators to compete more effectively, providing customers with greater choice, better quality and greater network coverage in all parts of the country;
- substantially improves Virgin Media O2’s network position through access to more spectrum and reduces the current imbalance in spectrum holdings in the UK market;
- strengthens both parties’ networks across the UK and reinforces the commitment to invest in modernization, both in existing and new sites; and
- brings MVNO benefits through higher capacity network access over a wider network of locations.
About the Vodafone group
Vodafone is a leading European and African telecommunications company. We provide mobile and fixed services to more than 330 million customers in 15 countries (excluding Italy, which is held as a discontinued operation under the Vodafone Group), work with mobile networks in another 45 and have one of the largest IoT platforms in the world. In Africa, our financial technology businesses serve nearly 79 million customers in seven countries – handling more transactions than any other provider.
Our goal is to come together for a better future by using technology to improve life, business and help develop an inclusive, sustainable society. We are committed to reducing our environmental impact to achieve net zero emissions by 2040.
For more information, please visit www.vodafone.com, follow us on X at @VodafoneGroup or connect with us on LinkedIn at www.linkedin.com/company/vodafone.
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679
About Virgin Media O2
Virgin Media O2 launched on 1 June 2021 following the merger of Virgin Media and O2 (Telefonica UK)
The company has more than 45 million connections in the UK through its award-winning broadband, mobile, TV and home phone services. Its fixed network covers more than half of the country (17.2 million households served) along with a mobile network that covers 99% of the country’s population.
The company is on track to bring 5G to all built-up areas by the end of 2030 and has already launched 5G Standalone in 14 UK cities. It is also upgrading its fixed network to a full fiber network with completion in 2028. Together with a separate joint venture called nexfibre, which is expanding the fiber network to new areas of the country, Virgin Media O2’s total fixed footprint will reach around 80% of the UK once completed construction and upgrade work.
Through Virgin Media O2 Business, the company plays a leading role in supporting entrepreneurs, enterprises and the public sector in their digital transformation through a range of connectivity, security, cloud and tailor-made services. It is also the network of choice for mobile virtual network operators giffgaff and Sky Mobile, as well as managing a 50:50 joint venture with Tesco for Tesco Mobile.
Committed to harnessing the power of connectivity to drive change for people and planet, the company is taking steps to bridge the digital divide and build an inclusive, resilient and low-carbon economy. The company has set an ambitious commitment to achieve net zero carbon in all its operations, products and supply chain by the end of 2040.
Virgin Media O2 is a 50:50 joint venture between Liberty Global and Telefónica SA and is registered in England and Wales. Registration number: 12580944. Griffin House, 161 Hammersmith Road, London, United Kingdom, W6 8BS.