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Millions of Vodafone and O2 users will continue to enjoy a boost to mobile signal across the UK.
Virgin Media O2 and Vodafone have confirmed plans to extend their existing network-sharing agreement, which allows mobile customers to use masts from the rival carrier to improve signal. Under the renewed terms, the two popular companies will further extend the deal should Vodafone's proposed merger with Three go ahead.
O2 remains the UK's largest mobile network, with 23.8 million customers as of May 2023. It merged with Virgin Media three years ago in a behemoth £31 billion deal. In bronze medal position behind O2 and EE, Vodafone has 18.6 million UK subscribers, although it's braced to lose 4 million in Europe this month.
Vodafone and Three announced the £15 billion merger last summer.
At the time, Vodafone Chief Executive Margherita Della Valle described the merger as "great for customers, great for the country, and great for competition." As part of the deal, the combined telecom firm would invest £11 billion to upgrade 5G infrastructure to improve mobile coverage nationwide.
However, 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.
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. However, concerns raised around the Vodafone-Three merger include fears that it could reduce competition by cutting the number of network operators.
A successful merger would increase prices for the 85 million mobile phone customers in the UK, rival telecom firm BT warned earlier this year. The telecom giant also cautioned about "poorer network quality and reduced incentives to invest."
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.”
Mobile network O2 — the largest in the UK — is part of Virgin Media O2, a behemoth telecom company with a vast 5G network, millions of full-fibre broadband customers, and paid-for television packages
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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.
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“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.”
Additional Reporting By Martyn Landi, PA Technology Correspondent
