Vodafone and Virgin Media O2 have signed a new agreement that will extend their network sharing arrangement for more than a decade and bring onboard Three customers if its merger with Vodafone is approved. Vodafone said that many aspects of the deal expand on the existing arrangement but if the Three merger goes ahead then the new deal will see Virgin Media O2 buy spectrum from the merged entity.
Aside from direct customers of these networks benefitting from more expansive coverage, customers of MVNOs who piggyback on these networks will also benefit. In terms of investments, Vodafone and Three's merged entity will invest £11 billion its its network over the next decade while Virgin Media O2 will spend £2 billion annual to improve its networks and services.
We got the following comments from the heads of Vodafone and Virgin Media O2.
Ahmed Essam, CEO, European Markets, Vodafone said:
“With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK for the long-term, providing significant network improvements including more choice, better quality and greater coverage across the country. These benefits extend to both retail and wholesale MVNO customers. The proposed merger, together with this agreement, will boost competition by establishing a strong third player in the UK mobile market and will improve the balance of spectrum holdings, levelling the playing field between the UK’s mobile operators.”
Lutz Schüler, CEO of Virgin Media O2 said:
“This new agreement with Vodafone ensures that quality mobile network choice, performance, coverage and competition is enhanced to the benefit of millions of consumers, businesses and our mobile operator partners across the country. We are extending and bolstering elements of our existing network sharing arrangement, while also ensuring there is a robust, balanced and functional structure in place for the long-term should Vodafone and Three’s proposed merger gain consent. We believe that this new agreement addresses the issues we have voiced and the CMA outlined in its initial decision, and will now continue our engagement with the regulator in this spirit.”
Regarding the plan for Virgin Media O2 to buy spectrum at market value from the merged entity, Vodafone said that this will reduce the current imbalances in spectrum holding between the country's mobile network operators. It said that this will improve competition by allowing for increased capacity, speeds, and coverage.
Source: Vodafone
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