news

Virgin Media reveals agenda with Three/O2 deal endorsement

Virgin Media

The proposed acquisition of O2 UK by Three UK has become the source of incessant public debate, with Virgin Media the latest to declare its position.

Virgin Media chief exec Tom Mockridge has come out firmly in favour of the deal, which is initially counter-intuitive when you consider they compete, to some extent, in both mobile and fixed. However a second reading of his public statement reveals his likely agenda: the possibility of Virgin Media becoming an MNO in its own right, rather than the EE MVNO it currently is.

“‎Any competition concerns can be addressed without blocking the proposed O2-Three transaction,” said Mockridge. “The Commission has previously cleared mobile mergers which resulted in a reduction in the number of mobile operators from four to three, subject to wholesale remedies.

“In two of these cases, Austria and Ireland, Virgin Media’s parent company Liberty Global provides vigorous competition and consumer choice as a result of taking EU remedies. The same can be true in the UK.  A combined O2-Three could have more to offer consumers and, crucially, more capacity for other providers who want to drive competition in their own right. With the right remedies, this deal could stimulate not curb competition.”

The fact that the EC cleared the parallel Three/O2 deal in Ireland in 2014 is an important precedent as it also reduced the number of MNOs in that country from four to three. The two conditions attached to that approval were: 1. A commitment to maintain the Eircom (Meteor) network sharing agreement and 2. A commitment to support two new MVNOs and make spectrum available from the start of this year in case either of them wants to become a full MNO.

It’s not immediately obvious what this vigorous competition provided by Liberty Global in Ireland consists of since Virgin Media Ireland only launched its MVNO on Three’s network last October, but it presumably has big plans and maybe has an eye on the spectrum that has just become available.

Virgin has a long-standing MVNO on EE’s network in the UK, so ‘the right remedies’ presumably consist of Three/O2 being obliged to support a new MNO entrant such as Virgin Media, to pick a random example.

The timing of a potential opportunity such as this couldn’t be better for Virgin Media following the approval of the BTEE deal. Virgin is the only significant consumer fixed broadband provider not dependent on BT’s network and it may not be totally in love with the idea of BT becoming its mobile wholesaler. In addition the combined BTEE has a very compelling multiplay offering that Virgin is under pressure to counter. Having its own mobile network would definitely be a step in the right direction.


Leave a comment

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Polls

Are add on's such as Genee a useful additional to your working day or just a quirky gimmick?

Loading ... Loading ...