- The new Network Sharing Agreement (‘the Agreement’) significantly extends the current agreement between Vodafone UK Limited (‘Vodafone UK’) and VMED O2 UK Limited (‘Virgin Media O2’) by more than ten years;
- Subject to the UK Competition and Markets Authority clearing the merger between Vodafone UK and Three UK (‘MergeCo’), the agreement provides a stable basis for MergeCo’s extensive network to participate in the network sharing agreement and will see Virgin Media O2 acquire spectrum from MergeCo;
- The deal and the creation of MergeCo will transform the experience for tens of millions of customers in the UK and (subject to CMA approval) rebalance the mobile market by creating a third large-scale network operator;
- The deal will extend the benefits of MergeCo’s committed £11 billion network investment plan to Virgin Media O2 customers and the mobile virtual network operators (‘MVNOs’) with which it has wholesale partnerships; and
- The agreement and the creation of MergeCo will significantly increase competition in the retail and wholesale mobile telephony markets.
Vodafone UK and Virgin Media O2 have agreed to extend and enhance their existing mobile network sharing agreement for more than a decade, improving mobile coverage across the country and providing customers with better services.
Many elements of the deal extend the existing arrangement between Vodafone UK and Virgin Media O2 and are independent of the merger of Vodafone UK and Three UK. However, subject to completion of the merger, the operators have agreed that Virgin Media O2 will acquire spectrum from the newly formed MergeCo, creating three scaled mobile network operators, each with better alignment of spectrum ownership.
Combining MergeCo’s commitment to invest £11bn in its network over the next decade (subject to CMA approval) with Virgin Media O2’s £2bn annual investment in its networks and services, the deal will ensure that the quality of mobile connectivity, choice and competition is improved. This will not only benefit the companies’ respective customers, but also businesses including MVNOs who use networks through wholesale partnerships to deliver their own mobile services to millions of people across the country. The deal will ensure that these virtual operators have access to a choice of three high-quality, scaled wholesale competitors, further supporting an already thriving MVNO segment in the UK.
Ahmed Essam, CEO, European Markets, Vodafone said: “With this agreement and our merger with Three, we are transforming the mobile experience for over 50 million customers in the UK for the long term, delivering significant network improvements including more choice, better quality and greater coverage across the country. These benefits will apply to both retail and wholesale MVNO customers. The proposed merger, together with this agreement, will stimulate competition by establishing a strong third player in the UK mobile market and will improve the balance of spectrum ownership, levelling the playing field between UK mobile operators.”
Lutz Schüler, CEO of Virgin Media O2 said: “This new agreement with Vodafone will ensure that quality mobile network choice, performance, coverage and competition are enhanced for the benefit of millions of consumers, businesses and our mobile operator partners across the country. We extend and strengthen elements of our existing network sharing arrangement, while also ensuring that a robust, balanced and functional structure is in place for the long term, should the proposed merger of Vodafone and Three be granted clearance. We believe that this new agreement addresses the issues we raised and which the CMA outlined in its initial decision, and we will now continue our engagement with the regulator in this spirit.”
The agreement includes plans for Virgin Media O2 to purchase spectrum at market value from MergeCo, increasing its current holdings. The deal will reduce the current spectrum ownership imbalances between the UK’s mobile network operators, increasing competition in the mobile market and enabling MergeCo and Virgin Media O2 to offer their customers greater capacity, speeds and wider coverage.
Notes to Editors
Any reference to MergeCo is subject to approval by the CMA.
Subject to regulatory approval, the agreement between Virgin Media O2 and Vodafone
- increases the competitiveness of MergeCo and Virgin Media O2 and virtual operators, giving customers more choice, better quality and greater network coverage across all parts of the country;
- significantly improves Virgin Media O2’s network position through access to more spectrum, reducing the current spectrum ownership imbalance in the UK market;
- strengthens both parties’ networks in the UK, reinforcing their commitment to investing in upgrades, both at existing and new sites; and
- offers MVNOs advantages by giving them access to a higher capacity network across a greater number of locations.
About Vodafone Group
Vodafone is a leading European and African telecommunications company. We provide mobile and fixed services to over 330 million customers in 15 countries (excluding Italy, which remains a discontinued operation of the Vodafone Group), operate with mobile networks in a further 45 countries and have one of the world’s largest IoT platforms. In Africa, our financial technology businesses serve almost 79 million customers in seven countries, and manage more transactions than any other provider.
Our purpose is to connect for a better future by using technology to improve lives and businesses and help build inclusive sustainable societies. We are committed to reducing our impact on the environment to achieve net zero emissions by 2040.
For more information, please visit www.vodafone.com, follow us on X at @VodafoneGroup or connect with us on LinkedIn at www.linkedin.com/company/vodafone.
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679
About Virgin Media O2
Virgin Media O2 was launched on 1 June 2021 following the merger of Virgin Media and O2 (Telefonica UK)
The company has over 45 million connections in the UK through its award-winning broadband, mobile, TV and home phone services. Its fixed network covers over half the country (reaching 17.2 million homes) alongside a mobile network that covers 99% of the country’s population.
The company is on track to bring 5G to all populated areas by the end of 2030, and has already launched 5G Standalone in 14 UK cities. It is also in the process of upgrading its fixed network to full fibre to the site, with completion in 2028. Alongside a separate joint venture called nexfibre, which is extending fibre to new parts of the country, Virgin Media O2’s total fixed footprint will reach around 80% of the UK once both construction and upgrade work are complete.
Through Virgin Media O2 Business, the company plays a leading role in supporting entrepreneurs, enterprises and the public sector in their digital transformation through a range of connectivity, security, cloud and tailored services. It is also the network of choice for mobile virtual network operators giffgaff and Sky Mobile, and operates a 50:50 joint venture with Tesco for Tesco Mobile.
The company is committed to using the power of connectivity to drive change for people and the planet, taking action to close the digital divide and build an inclusive, resilient, low-carbon economy. The company has made an ambitious commitment to achieve net zero carbon across its operations, products and supply chain by the end of 2040.
Virgin Media O2 is a 50:50 joint venture between Liberty Global and Telefónica SA and is registered in England and Wales. Registration number: 12580944. Griffin House, 161 Hammersmith Road, London, United Kingdom, W6 8BS.