After rumors have circulated about a merger between UK broadband provider Virgin Media and mobile juggernaut O2, their parent companies (Liberty Global and Telefonica) released a statement today confirming the two are to join forces. This merger will see them become the “the leading fixed-mobile provider in the country,” putting a dent in the likes of Sky and BT.
It seems both companies see this merger as the avenue for growth splitting assets 50-50 and suggesting a valuation of $38 billion once everything goes through. Both companies have also been no stranger to putting themselves out there when it comes to exchanging assets, with Virgin Media mulling over an offer from Vodafone back in 2015, and O2 agreeing on a merger with Three. Both fell through due to European Commission competition fears but hopefully this time, everything goes smoothly for both parties involved.
They will be scrutinized but both Virgin Media and O2 are looking to get ahead of that questioning by suggesting they will be putting “customers first” and are willing to invest £10 billion in UK infrastructure over the next 5 years. Virgin Media and O2 have already been improving services by readying for 5G and expanding broadband reach, so this further cash injection can only compound this.
While many are quick to complain about both broadband and telecoms providers, this merger could see the public reap a number of benefits including potentially higher speeds and improved coverage. Prices could drop too, with synergies as well as shared resources coming together to create a communications powerhouse.
This could be good for consumers in another aspect; competition. As EE is currently boasting the best signal coverage in the UK, this new merger could see them be overtaken thus meaning potentially lower sign up prices from them, as well as other providers.
Will you be backing this merger and potentially be transferring over to their services once everything goes through? It’s certainly something to think about, especially with the improved coverage and broadband speeds many could reap from further investment into already stellar infrastructure.
