O2 and Virgin Media merger will form £31bn giant to take on BT

  • Home broadband provider Virgin Media and Mobile telecoms provider O2 are to merge to create a telecoms giant valued at £31bn in a bid to take on BT.

    Mobile operator O2 grew to a customer base of over 34 million users last year and provides the network for other operators such as Tesco Mobile, Sky Mobile, and Giffgaff. Virgin Media has comparatively fewer mobile users with just 3 million mobile customers, but has an additional six million home broadband and cable TV users.

    O2's owner Telefonica has been in talks with Virgin Media's owner Liberty Global on the possibility of a merger, with both firms announcing that they have now agreed terms. The combined company would be valued at over £31bn and would represent significant competition to BT in the entertainment and telecoms space.

    The announcement has faced opposition from consumer groups, with Which? calling for an investigation by the Competition and Markets Authority to ensure the deal is in the best interest of both firms' customers. A previous sale of O2 to rival mobile firm Three back in 2015 was blocked due to concerns that it significantly reduce the number of major mobile providers in the UK.

    Analysts predict that there's little chance that this merger would be blocked, however, given the overlap in business areas. It will provide opportunities to combine O2's mobile network with Virgin Media's home broadband and entertainment packages.

    Source: BBC News

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