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Merged Virgin Media and O2 UK to Appoint Lutz Schuler as CEO

Wednesday, April 7th, 2021 (8:33 am) - Score 3,048
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The existing Chief Executive Officer (CEO) of broadband ISP and TV operator Virgin Media UK, Lutz Schuler, has today been named as the overall CEO for the combined company that will exist once the proposed £31bn merger (50-50 joint venture) with mobile operator O2 (Telefonica UK) completes in the near future.

On top of that Patricia Cobian, O2’s existing Chief Financial Officer (CFO), has also been named as CFO for the joint venture.

At present, we’re still awaiting the outcome of the Competition and Markets Authority‘s (CMA) ongoing phase 2 investigation into the merger, which has raised some competition concerns but nothing that looks unsurmountable (here). In theory, there shouldn’t be too many obstacles to the deal since both operators’ largely focus on different parts of the UK telecoms market and a prior merger between EE and BT sailed through.

Assuming all goes well then the combined business has already proposed to invest a further £10bn into the UK over the next 5 years (here). The money would be used to help acceleration the deployment of 5G mobile and to expand their gigabit-capable home broadband network (via DOCSIS 3.1) to reach an extra 1 million premises “within 12 months of the merger closing” (total of 16 million).

On top of that the merged company has also previously spoken of their “ambition to accelerate investments” and connect a further 7 million homes to their gigabit broadband network “in the coming years.” Such a major network extension, using Fibre-to-the-Premises (FTTP) technology, would see them move into many smaller towns and villages.

Mike Fries, CEO of Liberty Global, and José Maria Alvarez-Pallete Lopez, CEO of Telefonica, said:

“We are about to embark on an exciting new chapter for Virgin Media and O2, and Lutz and Patricia are the right leaders to deliver on our ambition to create the UK’s national connectivity champion. Together they will build a strong, diverse and dynamic team that will bring more choice, more value and world-class innovation to over 46 million fixed and mobile customers and the broader consumer and enterprise market.

Lutz is a unique talent and a perfect fit for the new combined company. He has extensive experience in fixed and mobile and a fantastic track record at both Liberty and Telefonica driving transformation and growth. Together, Virgin Media and O2 will need to quickly capitalize on strategic opportunities in network expansion, digitalization, convergence, 5G and video – all areas where Lutz has a strong background and a clear vision. We couldn’t have a better leader steering us through these critical and exciting times.”

We strongly expect the merged business to launch a fixed line wholesale solution too for UK ISPs, thus placing them into direct competition with Openreach (BT). Such a change would represent a seismic shift in the UK broadband market and give Virgin Media’s network a new lease of life for future support and upgrades. Openreach’s rival gigabit-capable FTTP network is currently only available to 4.5 million premises vs VM’s 15 million.

The joint venture is also expected to deliver substantial synergies valued at more than £6 billion on a net present value basis after integration costs and will create a nationwide integrated communications provider with £11 billion of revenue. Barring any last-minute obstacles, the deal is due to complete by around mid-2021 (the CMA should rule on it next month).

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39 Responses
  1. Avatar Edward says:

    Let’s hope that Lutz brings some focus to network reliability.

    Once again my Virgin gig1 connection is offline this morning.

    Per usual there was no advance warning but the tech support telephone recorded message states “we are improving our network – your connection will be restored by 2pm”. This is the 3rd time in a week it’s been offline for half of the day on a week day – once again forcing me to scrabble round and try and get a hotspot working so I can actually work.

    Virgin’s network reliability and customer service is abysmal but there’s no sign of any alt-net providers doing anything round here and the BT Openreach alternative is too slow on uploads to be of use for home working.

    1. Avatar Anna says:

      I feel your pain Edward…

      21/5 here – That’s all I can get – but 3 doors down (literally) they can get 330/50 on G.fast!. My line is too long so my only hope it seems is Lightspeed Broadband when they come to my town – and I have e-mailed them literally pleading for them to include my little cul de sac! – I can get a wireless provider but they want £99 a month for 25mbps guaranteed and 50 off peak – and 10mbps upload. which is too much in my opinion – and they want to charge more when they start to do higher speeds! I will pay £99 a month sure for something near GB but not for less

    2. Avatar Anna says:

      As I understand it – Lightspeed are going to use the BT network and as my house has 1 active line and (according to the engineer) space for 2 more lines at the outside box. I am hoping they will just use that..

      I hope..

    3. Avatar Name says:

      He’s been appointed to cut the costs and maximise the revenue not to help random anonymous people complaining on the internet.

    4. Avatar Moses says:

      I’ve got the virgin hub 3 and mine hardly goes offline (I put the hub 3 in modem mode and it hardly ever has issues, because of got a Netgear router/wifi to handle the demand from laptops-smartphones & consoles).

  2. Avatar Craig says:

    Does that mean my new Virgin Mobile Sim Only contract will switch to using the poorer O2 signal rather than Vodafone?

    1. Mark Jackson Mark Jackson says:

      Eventually, yes, but Vodafone has only just taken over the mobile (MVNO) side of Virgin Mobile from EE, and they’ll hold that contract for 5 years. It will take that long for Virgin Media and O2 to develop the necessary solutions anyway before they can fully swap to the O2 platform.

    2. Avatar Anna says:

      Shame I have had to move away as O2 is the only provider which decent speeds in my area – it’s also the only one to actually cover my house according to Cellmapper.

    3. Avatar Anna says:

      It was meant to stay on EE until the end of the year! as it’s only 4G but they went back on that.

    4. Avatar Name says:

      As usually it all depends on the place where you live. Vodafone used to be very good in PE19 and now about four times worse than O2. Unfortunately I am afraid that since now O2 network will be hammered by Virgin mobile customers and there will be outstanding EE, nothinhg, nothing, nothing, O2/Vodafone, nothing, nothing, Three.

    5. Avatar aqx says:

      @name Thankfully you have still about 4 years 9 months before Virgin even consider switching to O2 for their mobile data, by then I’m sure all providers will have gotten their acts together.

    6. Avatar Leex says:

      Surprised o2 is worse actual signal (not speed) because almost all o2 masts or Vodafone masts share witch each other

      ee been very anti share with new mast sites (just ee only), most of the old t-mobile(ee)/3 share sites haven’t been upgraded to even 4g+ on 3, ee are not bothered because they have enough frequency space on these sites to keep up on 4g alone (3 is generally unreliable in certain locations due to this)

  3. Avatar Dave says:

    I don’t know if this has been asked before, but are the FTTP gigbit connections symmetric like with some other providers?

    Virgin is reliable and fast where I live and I would happily take a faster connection if the upload speed matched the download speed as that would help with working from home. However, CityFibre has been installed in my area and is about to go live so they are an option too.

    1. Avatar DaveD says:

      CF fttp is symmetrical.

    2. Avatar Anna says:

      Virgin No, it’s 50mbps up.

      CityFibre will be 1000/1000 – there is no comparison cityfibre for now will win every time and it if was me I’d so be done with VM!

    3. Avatar Dave says:

      That confirms what I thought I had read regarding Virgin and CityFibre services. I think my plan will be to get CF via a provider and then downgrade Virgin to the slowest package so I can keep the V6 box for TV. A backup Internet service is always useful to me in my line of work and the company I work with will pay for that side of things anyway.

    4. Avatar Anna says:

      Dave you could however get another FTTP line instead? you know you can keep the TV and box without the internet right? I think the lowest VM do is 50mbps but I am sure there is a CF provider who can beat that price as VM keep the 50mbps service around £25 I think

    5. Avatar AQX says:

      @Anna if he downgraded to no broadband then they’ll remove the V6 he has and replace with a Tivo500, which is a dogshit alternative and remove all recordings he has.

    6. Avatar Name says:

      Virgin is wannabe FTTH. It is a hybrid based on DOCSIS and all you can get is 50Mbps of upload.

    7. Avatar Dave says:

      @Anna @AQX That’s my understanding. The Virgin TV boxes will only work on Virgin’s network and not via another ISP and so they would remove the V6 box and give me the old rubbish Tivo box which has it’s own Internet connection that is sufficient for basic HD streaming. The V6 has no ability to have an Internet connection of its own and if it did it would require a Virgin connection anyway.

    8. Avatar AQX says:

      @Dave Virgin forcefully remove the V6 from the account, even if you have internet from someone else. The 500 is just outdated and hasn’t been changed in terms of hardware since it’s 2010/2011 release.

    9. Avatar Dave says:

      @AQX That’s what I would expect them to do. As I say, it doesn’t work with another ISP anyway and I know this because I’ve tried it 🙂

      I’ve had the old Tivo box before I had the V6. I won’t be going back.

    10. Avatar A says:

      As it stands their Gig1 gigabit service is 52mbps on the upload. Virgin have advised that this will change to their normal 10:1 on the upload they provide on a number of their other services. So, eventually you’ll have 100(+)mbps on the upload.

      Something to note:

      They’ve trialed over 200(+)mbps upload on their DOCSIS 3.1 network, so that’ll hopefully be an available option at some point.

      I understand a lot of people want symmetrical speeds, but the reality is they’re hardly utilising their upload (in relation to their download speed). 52mbps is hardly something to turn your nose up at. You can upload a full gigabyte file in less than 3 minutes with that speed, or have two, perhaps even three people streaming in full HD whilst gaming (if you so desired) with plenty of room to spare.

    11. Avatar Sheeple Spotter says:

      Ahh the typical fan boys out in force.

    12. Avatar CarlT says:

      The v6 doesn’t have a standard Internet connection so cannot work on anything other than VM.

  4. Avatar Anna says:

    If they just merged why are they using Vodafone!? I mean I was thrown off 4G from EE to Voda when they said 4G would remain until the end of the year and around here Voda is rubbish but O2 is good!

    They should have just used o2 and then I wouldn’t have had to leave to go to O2!

    1. Avatar JP says:

      Read the damned story!

    2. Avatar Anna says:

      Boil your dam head!!

    3. Avatar JP says:

      ‘Yawn!’

  5. Avatar Ferrocene Cloud says:

    VM-O2 are going to have to seriously improve the network if they’re going to open it up. VM’s leased lines are fine, but the idea of a customer taking out a DOCSIS connection in an oversubscribed area and having to troubleshoot that would be a nightmare. Or someone complaining about latency issues.

    I’m sure anyone who’s worked in the industry will have plenty to say about Openreach, but in my experience they keep the fibre part of their access network in good shape.

    1. Avatar Mike says:

      Perhaps that’s why they haven’t opened up so far, the network is a mess…

    2. Avatar Leex says:

      Docsis 3.1 seems to work well (950/50 here or 115MB/5MB ish)

      Ping gets very spiky when upload is used past 10mbs thought (I welcome real FTTP when it comes from openreach) but that’s 18 months away now (hopefully they have the fibre pot on the pole by then)

    3. Avatar Andy says:

      O2 used to have a policy of under-promising and over-delivering. I hope they can bring that ethos to VM, who, based on my experience seem to be the polar opposite: Gig1 service here in an area that has terrible issues with upload and latency. Complaints escalated to their executive office got nowhere, except being told that I need to manage my expectations better. The eventual resolution was to release me from the contract tie in.

  6. Avatar M says:

    How about investing in a better business ethic since VM is literally the worst company that anyone could ever do business with in the entire history of the telecommunications sector.

  7. Avatar Rich Branston says:

    Dual-stack IPv6 and competent CPE must be coming any century now…

  8. Avatar Ig Og says:

    Two worst companies. Call 0800 952 2277 to cancel.

  9. Avatar Cheesemp says:

    Is there ever a good way of telling if VM are going to expand into your area? They have a lot of the bigger towns in my neck of the woods but my little town doesn’t. I have seen a few VM works on one.network on the main bypass but could just be dark fibre. I know VM isn’t great but when you are stuck on long line FTTC and no decent 4g its better than nothing (and hopefully competition will spur Openreach in the area).

  10. Avatar SymetricalAccess says:

    Great! Now I’m going to have to ditch O2, what a pain in the backside.

  11. Avatar Makaveli101 says:

    I’m still waiting on ipv6, BT have that already deployed

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