New network sharing agreement significantly extends the current arrangement between Vodafone UK and Virgin Media O2, aiming to enhance mobile network services across the UK.

Key Highlights

• Extended Agreement: The new agreement extends the current partnership between Vodafone UK and Virgin Media O2 for over a decade, aiming to improve mobile services and coverage across the UK.
• Merger-Dependent Enhancements: Subject to the UK’s Competition and Markets Authority (CMA) approval of the merger between Vodafone UK and Three UK (referred to as ‘MergeCo’), the agreement will allow MergeCo to participate in the network sharing agreement, with Virgin Media O2 acquiring spectrum from MergeCo.
• Market Transformation: The agreement and the formation of MergeCo are expected to transform the mobile market in the UK by creating a third major network operator, enhancing competition and rebalancing spectrum holdings.
• Investment Commitments: MergeCo has committed to an £11 billion network investment plan over the next decade, while Virgin Media O2 will continue its £2 billion annual investment in networks and services.

Enhanced Mobile Network Sharing

The extended agreement will build upon the existing arrangement between Vodafone UK and Virgin Media O2, ensuring better quality mobile coverage and improved services for customers. Even independent of the Vodafone UK and Three UK merger, the agreement includes several enhancements to the existing partnership.

Spectrum Acquisition and Network Investment

Should the merger be approved, Virgin Media O2 will acquire additional spectrum from MergeCo, aiming to reduce the current imbalances in spectrum holdings among the UK’s mobile network operators. This will allow both MergeCo and Virgin Media O2 to provide increased capacity, faster speeds, and broader coverage for their customers.

The combined investments from MergeCo and Virgin Media O2 will ensure enhanced quality mobile connectivity, offering more choice and competition not only to their customers but also to mobile virtual network operators (MVNOs) who rely on these networks.

Statements from Executives

Ahmed Essam, CEO of European Markets at Vodafone, said: “With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK, 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, added: “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.”

Benefits to Consumers and MVNOs

The agreement ensures that MVNOs will have access to a higher capacity network across a wider grid of sites, supporting an already thriving MVNO segment in the UK. This will provide more choice, better quality, and greater network coverage for all customers.