That’s it. After months of consultation, the Competition and Markets Authority (CMA) cleared the £ 31 billion combination of Virgin Media and O2 on Thursday May 20, 2021. Despite some early concerns, the combination of Virgin Media and O2 could result in higher costs For customers or as an incentive to reduce service to competing networks (like Sky Mobile) based on the infrastructure created by O2, the CMA has decided to allow the deal to close unhindered. This is not entirely surprising.
After all, Virgin Media and O2 executives have been pretty boyish about the chances of the multi-billion dollar deal getting the stamp of approval (even the appointment of the merged company’s new CEO) before the summer. And the companies can move on to the next stage of their joint venture on time.
So, for everyone who currently has a contract with Virgin Media and O2 … what does it all mean?
To be honest, it’s hard to tell at the moment. Virgin Media and O2 have both pledged a huge £ 10 billion infrastructure investment over the next five years. If you’re an O2 customer and you’re struggling with low signal, inconsistent 5G connectivity, or other issues in certain areas, hope a piece of money will go into solving those issues. If you’re a Virgin Mobile customer and you’re experiencing the same issues, your cellular network needs to be upgraded before those £ 10 billion are spent.
That’s because Virgin Media doesn’t currently own a 5G network. Instead, Virgin Media has signed a deal with Vodafone to use the 5G network so its customers don’t miss a thing. With O2 running its own 5G infrastructure, we have to imagine that one of the benefits of the merger is that Virgin will finally get its own infrastructure with 5G masts across the UK.
If you’re happy with your current SIM-only or phone-only contract from Virgin Media or O2, we hope that 4G and 5G coverage (and fingers crossed, download speed) will slowly increase in the months and years to come.
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But what about Virgin Media fiber broadband customers? What are the benefits of the £ 31 billion merger?
Well, the regulator’s green light is already bringing some good news for all Virgin Media broadband customers patiently waiting to upgrade their next generation gigabit fiber optic link. That’s because Lutz Schuler, who currently heads Virgin Media in the UK but will become Chief Executive Officer (CEO) of the combined company Virgin Media-O2, has committed to bringing an additional million households to this gigabit-enabled broadband within 12 years to be added months after the completion of the merger ”.
Virgin Media had already promised to reach a target of 15 million households by the end of this year. After the regulatory authorities have issued the seal of approval, the additional obligation will increase the amount to 16 million by the end of 2021. That’s really impressive. For comparison: Openreach from BT, which provides broadband connections to BT, EE, Sky, TalkTalk, Plusnet and other providers, has connected around 4.5 million locations with its gigabit-enabled fiber optic broadband. And Virgin Media-O2 does not plan to reduce its lead over the competition anytime soon.
The newly merged company had previously spoken of a “goal to accelerate investments” and “in the coming years” to connect 7 million more households to Gigabit-enabled broadband. It’s unclear exactly where these homes would be, but it could be that smaller towns and villages see these future-proof connections come online. With millions choosing to work from home permanently, these upgrades could make a number of rural cities viable for those looking to leave cities behind.
This is not entirely new. We have already seen that competitors use this type of incentive. BT’s own mobile network EE currently offers a three-month free subscription to BT Sport. If you look at the EE network, you will not be billed for any of the data used to stream matches). There is also a “Smart Benefit” for some customers with monthly payments and only for SIM cards, which bundles, for example, a free BT Sport subscription for the duration of your contract.
So if you’re a loyal O2 customer and want to raise the cash on a new paid TV subscription that includes Sky Cinema, Sky Sports, and a super fast broadband connection, it might be worth taking a few more weeks off to see what Virgin Media customers are looking for its sister brand before signing a two-year deal.
Finally, along with the potential giveaways and perks for existing Virgin Media and O2 customers, it could also be a good career change opportunity. That’s because parent companies Liberty Global and Telefonica are committed to creating 4,000 jobs and 1,000 apprenticeships if they get regulatory approval from the CMA.
