Virgin Media and O2, two of the biggest names in the telecommunications industry, officially merged in a 50:50 joint venture between their owners Liberty Global and Telefónica. In what is now the UK’s largest ever telecoms deal, the new Virgin Media O2 (VMO2) has now launched with a new logo featuring both brands combined as one.
The full completion of the £31bn merger is set to create some 2,000 new jobs in the UK, as well as supporting 1,000 apprenticeships. VMO2 has also launched its Virgin Media O2 Together Fund to help support small charities across the UK, donating £1,000 grants. This is to “support and celebrate community spirit, belonging and togetherness”, according to its website.
In an interview with City A.M., Ant Morse, head of digital solutions at O2, revealed some new technologies that are in the works and how customers will be affected.
Even though it's only newly formed, VMO2 automatically became one of the largest UK providers, with a combined 47 million customers across all of its services, 430 retail stores and 18,000 employees.
"The new business becomes one of the UK’s largest, with 47m connections across broadband, mobile, TV and home phone. It offers connectivity services, applications and digital solutions to tens of thousands of UK businesses and public sector organisations."
Though the biggest impact of the merger will be in network and systems integrations, the newly merged telecoms provider is now in a position to offer more cross-selling and better bundle deals to its customers.
Both residential and business customers of Virgin Media and O2 will be able to benefit from combining mobile, broadband, landline and TV services.
As many of us will continue to work from home at least part-time going forward, VMO2 is racing to claim its share of this new market and improve the virtual working experience.
"Our own O2 business research has found that the majority of workers, about 74 per cent, now want the ability to work from a mixture of places, be that home, the office or elsewhere. In the case of video and unified communication, this widespread hybrid working adoption will continue to drive further and significant transformation for our industry.
"From improving virtual meetings, workshopping, and meeting room bookings, to virtual presenting, or more advanced solutions such as Virtual Reality and holograms – we’re seeing innovation, fuelled by the inevitable race for customer spend, ready to create real progress ahead."
Virgin Media O2 will now look at combining its broadband, phone, TV and mobile network business, making it a powerful competitor to other quad-play providers like BT and Sky.
From its new position, VMO2 is set to take on BT in its goal to “upgrade the UK” through a £10bn investment in the rollout of fibre broadband and 5G infrastructure over the next five years.
A statement from the company at the time of the merger announcement said, “Building on the success of its existing fibre network expansion activity, the business is planning to go further and faster by deploying fibre to millions of additional homes across the country. A variety of options, including potential partnerships, are currently being worked on to achieve this.”
In previous statements, the company stated its plans to expand its gigabit-capable broadband network to an additional one million homes within 12 months of the merger closing, bringing its reach to 16 million homes.
Lutz Schüler, CEO of VMO2, said:
“With the fastest broadband and most reliable mobile network in the UK today, Virgin Media O2 is the complete package.
“We are ready to shake up the market and be the competitor the country needs at a time when choice has never been more important. Through investment and innovation in cutting-edge infrastructure and future technology, we will connect more people to the things they love, support communities across the country, help businesses to grow, and power the UK economy.
“With no limit to our ambition, we’re here to upgrade the UK – and our mission starts today.”
Schüler has expressed his interest in the past to take on Openreach as a wholesale network, opening up competition for the BT-owned network and allowing other brands to move from Openreach to Virgin to provider their broadband services.
The real life details of this remain to be seen, but if major providers like Sky Broadband were considering moving over to Virgin, this could seriously disrupt BT’s hold on the UK broadband market.