O2 and Virgin Media to merge operations from 2021 | Major Businesses | Business
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Just days after rumours first emerged of talks between their respective parent companies Liberty Global and Telefónica, UK cable company Virgin Media and the UK’s largest mobile phone operator by customers, O2, have officially revealed that they are to merge their operations.
VirginMedia network 25March2020
The 50-50 joint venture, expected to close around the middle of 2021 subject to regulatory approvals and other closing conditions, will create what the partners say will be the UK’s leading fixed-mobile provider. The combination of Virgin Media and O2 will create a nationwide integrated communications provider with over 46 million video, broadband and mobile subscribers and an estimated £11 billion of revenue.

The deal will combine O2's core network of mobile users as well as those from mobile virtual network operators (MVNOs) Giffgaff, Sky Mobile, Tesco Mobile and Lycamobile with the Virgin cable network which is rapidly being upgraded for gigabit broadband. The two combined networks would see the synergy of Virgin’s plans to offer gigabit speeds to more than 15 million homes across its network by the end of 2021,delivering half of the UK government’s stated broadband ambition for fibre networks in Britain four years early, with O2’s expanding 5G network which the mobile operator says will have a transformative effect on the UK’s live entertainment industry, potentially to the tune of £2.3 billion over the next ten years.

Executive leadership of the joint venture will be agreed prior to the closing. The board will consist of eight members, four from each of Liberty Global and Telefónica. Mike Fries, CEO of Liberty Global, and José María Álvarez-Pallete chief executive of Telefónica, will sit on the board. The post of chairman will be held for alternating two-year periods by Liberty Global or Telefónica with Liberty Global holding the position first.

Commenting on the merger, Álvarez-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. This is a proud and exciting moment for our organisations, as we create a leading integrated communications provider in the UK.”

With Virgin Media and O2 together, the future of convergence is here today, Fries added. “We couldn’t be more excited about this combination. Virgin Media has redefined broadband and entertainment in the UK with lightning fast speeds and the most innovative video platform. And O2 is widely recognised as the most reliable and admired mobile operator in the UK always putting the customer first. When the power of 5G meets 1 gig broadband, UK consumers and businesses will never look back.”