Save, make, understand money

Household Bills

O2 and Virgin Media become ‘Virgin Media O2’

Emma Lunn
Written By:
Emma Lunn

The two companies have joined forces in a £31bn tie-up and become Virgin Media O2.

Combined, Virgin Media O2 now has 47 million customers across broadband, mobile, TV and home phone, and is describing itself as the ‘new power couple’ in an email to customers.

The Competition and Markets Authority (CMA) gave the merger the go ahead last month.

The 50-50 joint venture is jointly owned by Liberty Global and Telefonica. It says it will offer consumers better connectivity, choice and value.

The combination creates a stronger fixed and mobile competitor in the UK market, supporting the expansion of Virgin Media’s giga-ready network and O2’s 5G mobile deployment. The merger will challenge the dominance of BT, which bought rival EE in 2015.

Virgin Media O2 says a “fully converged platform will put customers first” and it plans to invest £10bn in the UK over the next five years.

Jose Maria Alvarez-Pallete, Telefonica’s chief executive officer, 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.”

Mike Fries, chief executive officer of Liberty Global, said, “With Virgin Media and O2 together, the future of convergence is here today. We’ve seen the benefit of FMC first-hand in Belgium and the Netherlands. When the power of 5G meets 1 gig broadband, UK consumers and businesses will never look back. We’re committed to this market and are right behind the government’s digital and connectivity goals.”

What will change for customers?

Initially, nothing will change for O2 or Virgin Media customers. Existing services will continue to be delivered as normal. However, plans are underway to offer “seamless broadband, entertainment and mobile services all in one place” later this year.

The Virgin Media and O2 merger could mean more customers will be able to access the 5G network. Virgin Media struck a deal with Vodafone to use its 5G network and the deal is likely to mean that O2 customers will also have access to this.

Usually, buying your mobile and home broadband from the same supplier works out cheaper. So, the merger could see more, and cheaper, mobile and broadband bundles.

Experts also say that the merger will put Virgin Media/O2 in a position to take on BT/EE on price.