VODAFONE & VMO2 ANNOUNCE NETWORK SHARING AGREEMENT

Vodafone Group Plc

03 July 2024

 

3 July 2024

VODAFONE AND VIRGIN MEDIA O2 ANNOUNCE NEW, LONG-TERM NETWORK SHARING AGREEMENT

·     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') for more than a decade;

·     Subject to the approval of the merger between Vodafone UK and Three UK ('MergeCo') by the UK's Competition and Markets Authority, the Agreement provides a stable basis for MergeCo's enlarged network to participate in the network sharing agreement and Virgin Media O2 will acquire spectrum from the MergeCo;

·        The Agreement and formation of MergeCo will transform the experience for tens of millions of customers across the UK and (subject to CMA approval) will rebalance the mobile market by creating a third scaled network operator;

·     The Agreement will extend benefits from MergeCo's committed £11 billion network investment plan to customers of Virgin Media O2 and to the mobile virtual network operators ('MVNO') with whom they have wholesale partnerships; and

·       The Agreement and formation of MergeCo will significantly enhance competition in the retail and wholesale mobile markets.

Vodafone UK and Virgin Media O2 have agreed to extend and enhance their existing mobile network sharing agreement for more than a decade, bolstering quality mobile coverage across the country and delivering improved services for customers.

Many elements of the Agreement expand on the existing arrangement between Vodafone UK and Virgin Media O2 and are independent of the Vodafone UK and Three UK merger outcome. However, subject to completion of the merger, the operators have agreed that Virgin Media O2 will acquire spectrum from the newly created MergeCo, establishing three scaled mobile network operators each with better alignment of spectrum holding.

Through a combination of MergeCo's commitment to invest £11 billion in its network over the next decade (subject to CMA approval) and Virgin Media O2's £2 billion annual investment in its networks and services, the Agreement will ensure quality mobile connectivity, choice and competition is enhanced. This will not only benefit the companies' respective customers but also businesses, which includes MVNOs who make use of networks via wholesale partnerships to deliver their own mobile services to millions of people across the country. The Agreement will ensure 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 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."

The Agreement includes plans for Virgin Media O2 to purchase spectrum at market value from MergeCo, increasing their current holding. The Agreement reduces the current imbalances in spectrum holding between the UK's mobile network operators, which will enhance competition in the mobile market allowing MergeCo and Virgin Media O2 to provide increased capacity, speeds and greater coverage for their customers.

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Notes to Editors

Any reference to MergeCo is subject to CMA approval.

Subject to regulatory approval, the Agreement between Virgin Media O2 and Vodafone

·        increases the ability of MergeCo and Virgin Media O2 and virtual operators to compete more effectively, providing customers with more choice, better quality, and greater network coverage in all parts of the country;

·        materially enhances Virgin Media O2's network position through access to more spectrum, reducing the current imbalance in spectrum holdings across the UK market;

·        enhances both parties' networks across the UK, reinforcing the commitment to invest in upgrades, both at existing and new sites; and

·        benefits MVNOs through access to a higher capacity network across a wider grid of sites.

For more information, please contact:
Investor Relations:	investors.vodafone.com	[e-mail]	Media Relations:	Vodafone.com/media/contact	[e-mail]
Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679

About Vodafone Group

Vodafone is a leading European and African telecoms company. We provide mobile and fixed services to over 330 million customers in 15 countries (excludes Italy which is held as a discontinued operation under Vodafone Group), partner with mobile networks in 45 more and have one of the world's largest IoT platforms. In Africa, our financial technology businesses serve almost 79 million customers across seven countries - managing more transactions than any other provider.

Our purpose is to connect for a better future by using technology to improve lives, businesses and help progress inclusive sustainable societies. We are committed to reducing our environmental impact to reach 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.

About Virgin Media O2

Virgin Media O2 launched on 1 June 2021 following the merger of Virgin Media and O2 (Telefonica UK)

The company has more than 45 million UK connections across its award-winning broadband, mobile, TV and home phone services. Its fixed network covers more than half of the country (17.2m homes serviceable) alongside a mobile network that covers 99% of the nation's population.

The company is on track to bring 5G to all populated areas by the end 2030, and has already launched 5G Standalone in 14 UK cities. It is also upgrading its fixed network to full fibre to the premises with completion in 2028. Alongside a separate joint venture called nexfibre, which is expanding fibre to new areas of the country, Virgin Media O2's total fixed footprint will reach around 80% of the UK once both build and upgrade work is completed.

Through Virgin Media O2 Business, the company plays a leading role supporting entrepreneurs, enterprises and the public sector with their digital transformation through a range of connectivity, security, cloud and tailor-made services. It is also the network of choice for mobile virtual network operators giffgaff and Sky Mobile, as well as managing 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 building an inclusive, resilient, and low carbon economy. The business has set 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. 

 

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