Cable operator Virgin Media has today confirmed that their Virgin Mobile network in the United Kingdom will, as part of a new 5-year agreement, continue to harness EE’s (BT) Mobile Virtual Network Operator (MVNO) platform in order to deliver 3G and 4G based mobile services.
Previously there had been some speculation that Virgin Media might seek to swap their MVNO setup to use a different network, which was partly fuelled by the operator’s concern over BT’s £12.5bn merger with EE (i.e. BT is now Virgin’s arch rival in both the fixed line and mobile space, not to mention TV). Last year’s failure by Three UK and O2 to secure a similar merger may have also impacted their decision.
The press release suggests that the new deal will provide Virgin Media with “increased flexibility” to grow its Virgin Mobile operation and launch new services, which suggests that they’ve hammered out some attractive terms. As such today’s deal is a replacement rather than an extension to the original agreement, which will run until 2021.
On top of that it’s never easy for any large provider to swap MVNO platforms (just ask TalkTalk, which has been suffering a right old headache with their Vodafone to O2 move) and with over 3 million mobile customers there’s a lot of people who could be upset if it all went wrong. Sometimes stability is a good choice, even if it means working with one of your biggest rivals.
Peter Kelly, Managing Director of Virgin Mobile, said:
“This winning combination with EE will give Virgin Mobile even more control and firepower to deliver innovative services to the UK mobile market. Virgin Mobile customers want fast speeds, flexibility and plans packed full of data – we’re going to continue to deliver.”
Gerry McQuade, CEO of BT Wholesale and Ventures, said:
“This has proven a successful relationship for both parties for many years and, as we enter a period of further technological change in the mobile market, we are very pleased to renew and extend our 17 year old relationship. As the largest wholesale provider of telecommunications services in Europe, BT values the economy of scale that Virgin Media brings to our network.”
Hopefully the new deal also enables Virgin Mobile to keep pace with modern developments, particularly as they only recently launched their 4G Mobile service and this arguably took far too long to arrive (here).
It’s worth remembering that Virgin Mobile was also one of the world’s first virtual mobile operators when it launched in 1999.