Home
 » ISP News » 
Sponsored

Market Analysts Expect Virgin Media to Swap UK MVNO Partner from EE

Tuesday, June 2nd, 2015 (2:01 pm) - Score 1,826

A new research note from Berenberg Bank has estimated that BT’s on-going £12.5bn effort to buy mobile operator EE could in the long-term be good news for investors, but they also predict that it will result in Virgin Media ending their existing Mobile Virtual Network Operator (MVNO) deal with the UK mobile giant.

Berenberg’s note suggests that, by 2018, BT will generate £3.8bn of Free Cash Flow, post-restructuring charges and pre-pension top-up payments (based on a post-EE market cap of £45bn), which they describe as being “one of the most attractive sector valuations“.

But the apparently “conservative” estimate, which also predicts that there will be a £300m to £400m capex ramp at BTOpenreach for “fibre broadband” (FTTC/P) connectivity, is based on an assumption that BT’s buy of EE will ultimately lose them the MVNO revenues from Virgin Media.

The suggestion is that Virgin Media will switch their MVNO away from EE, which if the current developments pan out would leave them with only two options; swap to Vodafone or pick the newly combined O2 and Three UK (assuming the regulators also approve that merger).

The last option seems more logical given that O2 and Three UK don’t have a fixed line base of their own and are thus less of a direct threat, although there’s recently been growing speculation that VM’s parent, Liberty Global, would be willing to engage in a mega merger deal with Vodafone (here). Berenberg’s note seems to support such a deal.

ISPreview.co.uk contacted Virgin Media this morning to find out if the operator has held any discussions with regards to a possible split from EE, although so far the only response has been one of silence. We suspect they wouldn’t want to comment at this stage anyway.

In any case the big unknown in all this continues to rest with the competition review of BT and EE’s deal, not to mention Ofcom’s new strategic regulatory review of the wider market (here). Either one of those could produce a stumbling block for BT’s deal, although Berenberg anticipates that Ofcom won’t be too aggressive; at least not much more so than their recent proposal to open BT’s Dark Fibre up to rivals (here).

Leave a Comment
1 Response
  1. Avatar John says:

    VM may will move the mvno from ee but it historically has been with t-mob uk, now with greater reach as t-mob and orange are now EE.
    It’s aim is to give VM customer best coverage , Vodafone is not performing well with customer reports and O2 purchase by H3G will cause interesting moves with MBNL and o2 site reductions to reduce Opex.
    The changes have not stopped yet so is it a big deal that BT is a direct competor with VM?
    BT mobile was a mvno on Vodafone for many years ( it moved to EE last year)
    VM actually provide some back haul transmission to EE sites so one hand washes….
    As VF own cable and wireless if they move to merge with VM parent that would reduce choice in the business market.
    Will H3G remain without a broad band product… Unllikey maybe talk talk would be a target…..?

Comments are closed.

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Onestream £21.99 (*27.99)
    Speed 45Mbps, Unlimited
    Gift: None
  • NOW TV £22.00 (*40.00)
    Speed 36Mbps, Unlimited
    Gift: None
  • TalkTalk £22.00 (*29.95)
    Speed 38Mbps, Unlimited
    Gift: None
  • Hyperoptic £22.00
    Speed 50Mbps, Unlimited
    Gift: Promo Code: HYPERSALE
  • Plusnet £22.50 (*36.52)
    Speed 36Mbps, Unlimited
    Gift: £50 Reward Card
Large Availability | View All
Cheapest Ultrafast ISPs
  • Vodafone £25.00
    Speed: 100Mbps, Unlimited
    Gift: None
  • Virgin Media £26.99 (*44.00)
    Speed: 108Mbps, Unlimited
    Gift: None
  • TalkTalk £28.00 (*39.95)
    Speed: 145Mbps, Unlimited
    Gift: £14 for First 6 Months
  • Gigaclear £29.00 (*44.00)
    Speed: 100Mbps, Unlimited
    Gift: Promo Code: HELLO2021
  • Hyperoptic £29.00 (*35.00)
    Speed: 150Mbps, Unlimited
    Gift: Promo Code: HYPERSALE
Large Availability | View All
The Top 20 Category Tags
  1. FTTP (2983)
  2. BT (2854)
  3. FTTC (1824)
  4. Building Digital UK (1799)
  5. Politics (1750)
  6. Openreach (1688)
  7. Business (1509)
  8. FTTH (1348)
  9. Mobile Broadband (1319)
  10. Statistics (1299)
  11. 4G (1133)
  12. Fibre Optic (1098)
  13. Wireless Internet (1072)
  14. Ofcom Regulation (1057)
  15. Virgin Media (1049)
  16. EE (745)
  17. Vodafone (726)
  18. TalkTalk (703)
  19. Sky Broadband (694)
  20. 5G (601)
Promotion
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact