Vodafone and Virgin Media O2 announce new network-sharing deal

The firms said that at the heart of the deal was an agreement to extend their existing network-sharing arrangement of more than a decade.

A final decision on a proposed merger between Vodafone and Three is currently being considered by the Competition and Markets Authority (Chris Ison/PA) (PA Wire)

Vodafone and Virgin Media O2 have agreed to extend their existing mobile network-sharing agreement, and will extend it further should Vodafone’s proposed merger with Three UK go ahead.

A final decision on the proposed merger between Vodafone and Three is currently being considered by the Competition and Markets Authority (CMA).

Vodafone and Virgin Media O2 said the core of the deal was that they had agreed to extend their existing network-sharing arrangement of more than a decade, saying it helped bolster mobile coverage for customers across the country.

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

Ahmed Essam, Vodafone

But the two network operators also confirmed that should the Vodafone-Three merger be approved, Virgin Media would then acquire spectrum from the newly created merged companies to establish three scaled mobile network operators with a more balanced range of spectrum held by each.

The companies argue this would benefit both consumers and businesses across the country by enhancing choice, quality and network coverage.

Concerns raised around the Vodafone-Three merger include fears that it could reduce competition by cutting the number of major network operators in the UK.

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

Ahmed Essam, Vodafone

Ahmed Essam, chief executive of European markets for 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 mobile virtual network operators (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.”

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

Lutz Schuler, Virgin Media O2

Lutz Schuler, chief executive 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.”