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Virgin Media O2 UK Moves to Cancel Vodafone Mobile Deal UPDATE

Sunday, February 13th, 2022 (4:24 pm) - Score 34,392
Following the completion of the UK’s largest ever telecoms deal, the Virgin Media O2 logo is forged to celebrate the birth of the new company which brings together Virgin Media, the UK’s fastest broadband provider, and O2, the country’s favourite mobile network with a mission to upgrade the UK.Copyright: © Mikael Buck Credit: Mikael Buck / Virgin Media O2PR Handout – for use in conjunction with this story only.

A new newspaper report today states that Virgin Media (VMO2) has moved to cancel their 5-year Mobile Virtual Network Operator (MVNO) agreement with Vodafone UK, which was signed prior to the £31bn merger with O2 and replaced a prior MVNO deal with EE (BT).

Just to recap. At the end of 2019 Virgin Media signed a 5-year deal with Vodafone to run their MVNO platform, which effectively ended their long-running supplier deal with EE (here). Under the plan, Virgin Mobile’s services – back then reflecting c.3 million customers – would start to transition to Vodafone’s platform from the end of 2021, although some 5G (mobile broadband) services were introduced before that.

However, the MVNO deal was later cast into a cloud of uncertainty after the announcement of Virgin Media UK (Liberty Global) and O2’s (Telefonica UK) plan to merge, which came only a few months after the Vodafone deal had been agreed – the £31bn merger itself finally completed in mid-2021 (here).

Despite this, the newly merged VMO2 later confirmed that the agreement with Vodafone would continue – possibly because it would have been quite costly and complex to scrap it so late into the transition, which effectively made for a longer transition before the company could harness the full benefits of their merger with O2 (i.e. closer convergence).

Suffice to say, we initially weren’t expecting any major changes, but that began to change after VMO2 launch a new range of “VOLT” products last October 2021 that aimed to replace their existing “Oomph” bundles (here). In short, this meant that customers were able to buy Virgin Media and O2 products together, for the first time, and take advantage of new benefits.

At the time we remarked that the VOLT products, while a clever way to circumvent the MVNO issue (i.e. it’s merely a mix of O2 and Virgin Media products rather than full convergence), “could cause some confusion and frustration for customers on the Virgin Mobile platform, which aren’t currently able to access all the same benefits.” We suspect this might be part of the reason why there’s now been another big change.

According to a report on This is Money (Mail on Sunday), VMO2 is said to have issued a new letter to its bondholders, which in reference to the existing Vodafone MVNO deal stated that “notice has been given to cancel this agreement“. No further information has been provided by the newspaper and, since it’s Sunday, we probably won’t get any comment until Monday.

The news raises a number of questions, not least in terms of how much this will cost VMO2, what impact it will have on Virgin Mobile’s customers (another SIM swap?) and precisely when the agreement will be cancelled. We highly doubt they’d cancel the MVNO deal with immediate effect as it will take time to transition everybody on to O2’s platform, thus they’ll need to allow a year or so before the deal comes to a complete end.

UPDATE 14th Feb 2022 @ 6:33am

One of our readers (Credits to Adrian) has spotted that VMO2 actually made this statement in their previous Q2 2021 financial results, as part of an IFRS Bond Report. Buried deep on page 30 they state: “In November 2019, we entered into a new 5-year MVNO deal with Vodafone that enabled the launch of 5G services for our mobile customers in the U.K. in January 2021. Following the formation of the Joint Venture, notice has been given to cancel this MVNO agreement.” This may explain why it wasn’t spotted before.

UPDATE 14th Feb 2022 @ 9:56am

We’ve had a no comment response from VMO2.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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35 Responses
  1. Ex Telecom Engineer says:

    Does this demonstrate the haste, in agreeing and announcing the VM O2 merger? Since the VMO2 merger announcement was only 6 month’s after the signing of the Vodafone MVNO agreement. I have to assume the merger wasn’t on the cards, when the Vodafone MVNO agreement was signed.

    1. anonymous says:

      No. To simply assume that the O2 deal would have gone through in time and hope Vodafone would be fine to carry on providing service if it didn’t would’ve been insanity.

  2. Smythe says:

    Virgin Mobile is able to move networks without a SIM swap. SIMs were not swapped during the move from EE to Vodafone as far as I know.

    1. Gary says:

      That’s assuming they continue with Virgin Mobile as a MVNO.

      They may just phase out the Virgin Mobile brand and migrate everyone over to O2 at the end of their current contract period instead. This would make more sense considering the change to O2 for VOLT packages and the withdrawal of pay as you go.

  3. Alex A says:

    I think they’ll just start promoting O2 a lot more than Virgin Mobile, the Vodafone deal lasts only 2 more years so it might make more sense to just wait out those 2 years instead of trying to cancel.

    1. Richardr says:

      Isn’t the deal a five year one? Makes more sense that they can cancel it if possible.

    2. Alex A says:

      Good point, I though the 5 years started from when the deal was signed (late 2019) at which point they would now have a little over 2.5 years left. The 5 years runs from 2021 to 2026 so trying to cancel it makes sense, though its difficult.

      If VM are charged per usage then they could heavily incentivise people to switch to O2, as they are doing with VOLT.

      Future of VMO2 will be interesting with branding, whether they decide to scrap the two brands for one or stick with the BT strategy of have many brands so when someone gets annoyed with one of them they switch to another not realising theyve switched from BT to … still BT.

    3. ZX says:

      My guess is that they’ll eventually phase out the virgin brand altogether and rename everything o2. They’re currently paying Richard Branson a very hefty amount of money to use the virgin brand name.

  4. Adrian says:

    I’m not certain this is new – similar wording was on page 30 of their Q2 2021 report ( https://news.virginmediao2.co.uk/wp-content/uploads/2021/08/VMED-IFRS-Quarterly-Report-Q2-2021.pdf ) which has been available for a while.

    1. Mark Jackson says:

      Good spot Adrian, you’re right. Looks like they buried that one deep in the document, which may be why it wasn’t picked up before.

    2. binary says:

      Furthermore I think all this means is that VMO2 have given the normal contractual notice to end the deal.

      In other words, yes – notice has indeed been given (by VMO2 to Vodafone) to cancel the agreement – BUT this is does not translate as an early termination of the agreement. It just means the agreement will run its 5-year course, and so will end in 2026.

  5. Summers says:

    I’m on both o2 and Vodafone I think Vodafone deal broadband house air time so alot of money I’m cancel next August and stick with o2 might keep broadband 20 pound but if gose up I’m off it

    1. Rich says:

      I wish I could understand what you’ve written. Some punctuation would help, plus an explanation what you’re talking about! It sounded like it might be interesting or even useful information to know.

  6. Duncan says:

    The O2 network is under so much pressure it’s almost laughable in some areas. This will only pile more on top of it.

    They seriously need to invest and increase the capacity. Most people I know that are on O2 only use it as a basic calls and text service, which is why most people can get away with it. Data wise it just can’t cope.

    Even in my area the status page basically admits that the network is under strain and to essentially download anything you may need using WiFi at home before you go out and not to rely on the network. Hardly acceptable!

    1. Junior says:

      I totally echo your comments.
      They need to increase capacity and speed before adding more customers.

    2. Gareth says:

      I was on O2 when the iPhone 3G came out in around 2008. The network was so bad, back then that you simply could not get anywhere near 3G speeds which at the time where defined as 384Kbps.

      I can’t remember exactly how I did it, but I remember buying some kind of weird SIM adapter online that you let effectively unlock the phone (they were all locked back then) and I inserted a Three SIM which got speeds of over 1Mbps 🙂

      Over the years, I’ve tried O2 a few times and just recently I dicided to get a GiffGaff SIM to see if it could beat my Vodafone or Three SIM, they both get around 30 to 60Mbps in most places I go (Three gets 400Mbps+ when on 5G)….

      …I got less than 2Mbps on GiffGaff/O2. The network is a disgrace!

      Telefonica have been tryning to flog it for years and say “We are investing £1 million a day in our network”. I can only assume that investment involves smoking crack and drinking very expensive Champagne.

    3. Brickwizard says:

      I remember when it was BT Cellnet [BT No-net we used to call it] under the 02 brand coverage and reliability has much improved, although still a long way behind the other main players

  7. Anonymous says:

    In theory Virgin should be able to move without a SIM Swap – they did a lot of work before binning off EE to make it easier to change things and brought more things under direct control.

    1. Ade says:

      The change to Vodafone is causing a lot of no service problems, I have always had pretty good signal until 3 weeks ago,that is how long I have had no mobile. Signal strength where I live is around -100 Db ,service is patchy around the city.

    2. Ann says:

      I have the same experience m- with virgin swapping to vodaphone . They gave me a new SIM card , but it’s pointless paying for 150gb of data and watching my phone buffer, constantly . I purchased a new phone too … waste of time and money . Was fine on EE. Useless using vodaphone. 3 phone calls later & still no better – For this reason I’ll be leaving virgin .

  8. Guest says:

    Now this is only a potential theory and may not even happen BUT if VMO2 terminates the agreement for Virgin Mobile to use Vodafone infrastructure and Virgin Mobile is brought in house to use VMO2 infrastructure instead, could this then free up the way forward for a potential Three-Vodafone partnership?

    As the parties involved would not have the Virgin Media agreement in place so would be free to enter talks again so by the end of 2022, we have
    O2, EE and Voda3 as the main providers of telecommunications thus will be investing better and across more areas as is the case in other countries.

    Of course nothing may come of it but other then efficiency savings by bringing Virgin Mobile onto VMO2 infrastructure and merging it with O2, I don’t see why the need to discontinue the agreement is there.

    1. Mark Jackson says:

      It probably wouldn’t have a huge impact on the prospect of a Vodafone-Three merger either way. As a mobile-to-mobile deal, it would probably face greater scrutiny from Ofcom/CMA over various issues from pricing to MVNO competition (more generally), spectrum ownership and so forth.

    2. Guest says:

      That would be a very messy tie up if allowed to proceed by OFCOM. As o2 and Vodafone operate a shared RAN network.

  9. Mr Lindsay McDonald says:

    Good let hope they don’t go together virgin is very poor .

  10. Bent says:

    Couldn’t careless about virgin overpriced greedy media or 02

    1. AQX says:

      Care enough to click the article & comment

  11. Anuraj says:

    Wow

    Another 3 million virgin mobile users going to be on 02 LTE band 20.

    Already 02 4g speed slow. Less then 1 MEGA BITE speed. Hope they start to use band 1 and 40 more mast.

  12. AC says:

    O2 has far more than just Band 20 for 4G now.

    It has bands 1, 3 8, 20 and 40

  13. Guy Cashmore says:

    All very incestuous between the networks..

    1. Guest says:

      Have evidence to back up the slander claim there?

  14. litlephil says:

    This could be a good thing, but will not just happen overnight. VM02 are still young and finding there feet but at the start there was talk about powering 02 masts directly into virgin fiber lines, saving 02 money and bringing all there services together. It’s a normal thing to put all ur eggs in one basket, Vodafone was a back up in case ofcom did not let deal go through but they did. It will save money for the company probably, but there will probably be a fine, not for us, u pay for what u get but my 12 month deal came to an end just last week so called same deal £12 cheeper so it’s good to talk, I always call every year otherwise like any contract u will go onto normal rates. And VM02 may have new lines in which they want to take to increase there offerings such a portability up todate versions of the Dongel Mobile modem to go with it’s Stream TV?
    I can’t see them getting rid of Virgin Media as Liberty Global have always seen it as a iconic brand otherwise they could have easily changed it to there UPC branding like most. I think they will push more on VOLT as a merge package therefore having three virgin 02, and volt. But don’t quote me on that.

    1. NotLittlePhil says:

      Looks like you got up and wrote this before you were awake Phil. It doesn’t make any sense.

  15. David Chambers says:

    Virgin Mobile are now into a 3 month exercise to move all their subscribers onto O2. They would like it completed by the end of September.

    Also, all new SIM only deals are 30 day rolling. No 12 or 24 month contract.
    Read into that what you may

  16. Martin.S says:

    It’s happening folks, I got moved onto O2 today after a brief period of no service.

  17. DP says:

    Does anybody not find it quite strange that MVNO’s are not required to advise customers or offer them a contract break when they switch customers to another network. I originally joined VM to take advantage of EE’s rural coverage (ESN roll-out) but was switched to Voda without notification (thankfully they have coverage where I have a cottage in the west coast of Scotland). Now I notice I’ve been switched to O2, which has significantly worse coverage than EE or Voda in the places I visit frequently. Just waiting with baited breath to visit my holiday cottage next week to see if my phone will even work there anymore…

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