Vodafone UK and VMED O2 (Virgin Media O2) have unveiled an expanded network sharing agreement aimed at reducing costs and enhancing service capabilities.
This new agreement significantly builds on their existing partnership and is contingent upon the approval of Vodafone UK’s merger with Three UK (MergeCo) by the UK’s Competition and Markets Authority (CMA).
CMA in April said it was concerned the $18.8 billion merger deal, which combines 2 of the 4 mobile network operators in the UK, will reduce competition. This could mean that mobile customers face higher prices and reduced quality, including through lower investment in UK mobile networks, CMA said.
Under this agreement, MergeCo’s enlarged network will participate in the network sharing arrangement, and Virgin Media O2 will acquire spectrum from MergeCo. This move is set to extend the benefits of MergeCo’s planned £11 billion network investment to Virgin Media O2’s customers and mobile virtual network operator (MVNO) customers.
The agreement, which expands on many elements of the current arrangement between Vodafone UK and Virgin Media O2, is partially independent of the merger’s outcome. However, if the merger proceeds, Virgin Media O2 will purchase additional spectrum from MergeCo, aligning spectrum holdings among the UK’s mobile network operators to foster competition.
Ahmed Essam, CEO of European Markets at Vodafone, said: “With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK, delivering significant network improvements for the long-term.”
Lutz Schuler, CEO of Virgin Media O2, said: “This new agreement with Vodafone ensures enhanced mobile network choice, performance, coverage, and competition, benefiting millions of consumers, businesses, and our mobile operator partners nationwide.”
The deal includes plans for Virgin Media O2 to purchase spectrum at market value from MergeCo, addressing current imbalances in spectrum holdings. This adjustment is expected to enhance competition in the mobile market, allowing both MergeCo and Virgin Media O2 to offer increased capacity, speeds, and coverage to their customers.
Baburajan Kizhakedath
