VIRGIN Media and O2’s £31billion merger has been given the green light to go ahead by the Competition and Markets Authority (CMA).
It comes after O2’s parent company Telefónica announced last year that the two firms were in talks to merge.
2
The deal brings together O2’s 36.6million customers on its mobile networks with Virgin’s 5.7million cable users and 3.4million mobile subcribers.
O2 – which also provides the network for GiffGaff, Tesco Mobile and Sky Mobile – is the UK’s largest phone company.
The deal will also see all 12,000 Virgin Media employees and 6,500 O2 staff in the UK work under the same umbrella company.
The CMA was initially concerned that, following the merger, Virgin and O2 could raise prices or reduce the quality of their wholesale services.
2
This, in turn, could force competitors to offer lower quality mobile services or increase their prices, which would hit consumers.
However, the CMA has now concluded that the deal is unlikely to lead to “any substantial lessening of competition”.
The tie-up will create a major rival to BT by bringing together different platforms.
Mike Fries, chief executive of Virgin Media’s owner Liberty Global, and José Maria Alvarez-Pallete, chief executive of Telefonica, said the regulatory approval is a “watershed moment in the history of telecommunications”.
They added: “We are now cleared to bring real choice where it hasn’t existed before, while investing in fibre and 5G that the UK needs to thrive.
“We thank the CMA for conducting a thorough and efficient review.”
What does the merger mean for customers?
The Virgin Media and O2 transaction is expected to close by June 1, 2021.
But as the deal isn’t yet complete, there’s no change for customers for now as O2 and Virgin Media remain separate businesses.
The two firms are also yet to confirm exactly how it’ll impact customers.
When the merger was first announced, the two firms said it could mean lower prices, thanks to the cost savings the firms can make.
Bosses behind the merger also said it would speed up the rollout of 5G networks and high speed broadband to Brits across the country.
Plus, they said they’ll be better placed to compete with rivals, which could mean better value products and additional services and products.
This is thanks to O2 and Virgin Media’s broadband, mobile and TV being “bundled” together in one place.
O2 networks for GiffGaff, Tesco Mobile and Sky Mobile customers are included in the merger, but it’s yet to confirm how users will be affected.
When BT and EE started merging their networks in 2018, existing customers weren’t affected although they were encouraged to sign up for new deals.
For example, those who signed up to the new BT Plus service could get their broadband, internet and mobile bill in one place.
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In February, O2 was fined £10.5million for overcharging customers.
It then hiked prices a month later, with bills going up by 1.4%.
Meanwhile, Virgin Media went down in March and thousands of broadband customers struggled to use the internet.
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