Virgin Media and O2 approved to merge this summer, but what does that mean for customers?


Virgin Media and O2 have received the all-clear from UK regulators to proceed with a planned £31 billion merger. So, with these rival firms now set to become a single broadband, television and mobile phone behemoth – what does that mean for existing customers? And when can we expect to see some changes?

Announcing its decision to allow the merger to move ahead unimpeded, Competition and Markets Authority (CMA) inquiry chair Martin Coleman said: “O2 and Virgin are important suppliers of services to other companies who serve millions of consumers. It was important to make sure that this merger would not leave these people worse off. That’s why we conducted an in-depth investigation. After looking closely at the deal, we are reassured that competition amongst mobile communications providers will remain strong and it is therefore unlikely that the merger would lead to higher prices or lower quality services.”

First up, the green light for the merger spells good news for any Virgin Media customers patiently waiting for an upgrade to the firm’s next-generation gigabit-capable fibre broadband. That’s because Lutz Schuler, who currently leads Virgin Media in the UK but will become the Chief Executive Officer (CEO) of the combined Virgin Media-O2 company, has pledged to connect an extra one million homes to this gigabit-capable broadband “within 12 months of the merger closing”.

Virgin Media had already pledged to reach a target of 15 million homes by the end of this year, so now that regulators have given the stamp of approval, the extra commitment will bring the total to 16 million by the end of 2021. That’s seriously impressive.

For comparison, BT-owned Openreach – which supplies broadband connections to BT, EE, Sky, TalkTalk, Plusnet, and more – has connected some 4.5 million premises with its gigabit-capable fibre broadband. And Virgin Media-O2 isn’t planning to drop its vast lead over the competition anytime soon.

The newly-merged company has previously spoken about an “ambition to accelerate investments” and connect seven million more homes to gigabit-capable broadband “in the coming years.” It’s unclear exactly where these homes would be, but it could see smaller towns and villages see these future-proofed connections start to come online. With millions choosing to work from home permanently, these upgrades could make a number of rural towns feasible options for those looking to leave cities behind.

And when there isn’t a fixed-line broadband connection available, Virgin Media-O2 wants to keep you connected with 5G too. Yes, this £31 billion merger isn’t simply about fibre broadband, but is also designed to allow both companies to compete against BT and EE when it comes to next-generation mobile data speeds too.

Superfast 5G networks are widely expected to become essential to many customers in the coming years, thanks to speedy downloads and low-latency which many believe will accelerate remote working, Augmented Reality (AR) applications, and self-driving cars. As it stands, Virgin Media has struck a deal with Vodafone to piggyback on its 5G network so that its customers don’t miss out.

However, with the O2 merger now going ahead, Virgin Media will finally have its own 5G infrastructure across the UK. Virgin Media owner Liberty Global would be able to invest as it sees fit. It could also leverage the 5G network to power home Wi-Fi connections for those who aren’t currently connected to its fibre broadband infrastructure. So, you could have a 5G-powered hub supplying Wi-Fi to your devices before the road is dug up and your street is connected to the gigabit-capable cables. EE currently offers a similar solution to customers not able to tap into the Openreach broadband network.

In other words, with the merger now moving ahead, Virgin Media customers should expect to see more options around 5G coming online. And O2 customers should begin to see more integration with the services already on offer from Virgin Media, including super-fast home broadband, public Wi-Fi hotspots on the London Underground and elsewhere, and its TV 360 set-top box that competes with Sky TV.

Virgin Media now has a real incentive to tempt its broadband or telly customers to move away from rival mobile contracts, so we should expect to see exclusive deals to entice EE, Three or Sky customers to move their SIM-only plan or pay-monthly phone contract in-house with Virgin Media – like their home broadband. That could be a great way for customers with phone contracts, television, and broadband with three different companies to save some dosh – and make their Direct Debits a little simpler to read on the monthly statement.

As mentioned above, it’s possible we will see the two companies leverage one another’s strengths to compete with rivals. So, O2 could offer streaming of content from your Virgin Media TV V6 box when out-and-about without counting towards your monthly mobile data allowance, for example. This would be a clever way to tempt those who already pay for the telly to move their mobile contract in-house.

We’ve already seen rivals deploy these types of incentives – BT-owned mobile network EE is currently offering a three-month free subscription to BT Sport (and when watching on EE’s network, you won’t be charged for any of the data used to stream matches). There’s also a “Smart Benefit” available for some pay-monthly and SIM-only customers that bundles a free BT Sport subscription for the length of your contract.

Aside from the potential freebies and perks for existing Virgin Media and O2 customers, it could also be a good opportunity for a career change. That’s because parent companies Liberty Global and Telefonica have pledged to create 4,000 jobs and 1,000 apprenticeships if they receive regulatory approval from the CMA.

Published at Thu, 20 May 2021 15:49:00 +0000

Virgin Media and O2 approved to merge this summer, but what does that mean for customers?


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