April 11, 2021 at 7:56 pm #12790UK SentinelModerator
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VIRGIN MEDIA and O2 could merge within a few short weeks. In a new announcement about plans for the joint venture, the companies have pledged to bring supercharged home broadband speeds to one million more homes across the UK. Here’s what you need to know.
Virgin Media and O2 are set to merge into a single company in the coming months. The deal, first announced by parent companies Liberty Global and Telefonica back in May 2020, is still pending regulatory approval from the Competition and Markets Authority (CMA), but there doesn’t seem to have any major snags on the horizon. In fact, both companies are so confident that everything will be rubber-stamped in good time that they’ve confirmed the name of the new CEO for the combined company.
Lutz Schuler, who currently leads Virgin Media in the UK, will become the Chief Executive Officer (CEO) of the combined Virgin Media-O2 company when the £31 billion merger completes. Elsewhere, Patricia Cobian, Chief Financial Officer (CFO) for O2, will become the CFO for the joint venture too.
Should the merger go ahead as planned, the new company has already pledged to invest £10 billion over the next five years. The cash is expected to be used to increase the 5G roll-out, which will become available to both Virgin Media and O2 customers, as well as expand super-fast broadband.
In a completely sane world, madness is the only freedom (J.G.Ballard).April 11, 2021 at 8:00 pm #12791UK SentinelModerator
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Sky and Vodafone publish their objections to the Virgin/O2 UK merger
The CMA has published issues statements from Sky and Vodafone submitted as part of its investigation into the proposed merger of O2 UK and Virgin Media.
This phase of the Competition and Markets Authority review invites interested parties to speak now or forever hold their peace. It looks like Sky and Vodafone are the only ones to have raised objections. Sky seems worried about the merged company’s incentive to keep offering a decent wholesale service to MVNOs, while Vodafone just doesn’t like the thought of there being another converged player to deal with.
Here’s the key bit of Sky’s submission:
For the following reasons, Sky considers that post-merger the Merged Entity will have both the incentive and ability to engage in input foreclosure:
Incentive – O2’s incentives to provide wholesale mobile services on favourable terms… will materially reduce as the Merged Entity pursues increased uptake of fixed/mobile bundles benefitting from its converged and vertically integrated operations. According to the Parties’ own public statements, fixed/mobile convergence is a key rationale for the Proposed Merger at a time when interest in such services in the UK is increasing…; and Ability – the Merged Entity will have the ability to degrade Sky’s mobile service.
Pre-Merger, Sky considers that O2 is a willing partner that is incentivised to secure distribution to Sky’s fixed customer base and to resolve any commercial differences. Post-Merger, the change in O2’s incentives means it is uncertain to remain a willing partner and would have less incentive to resolve any commercial differences… it is impossible to provide contractually for all commercial circumstances or market developments over a long-term deal
In a completely sane world, madness is the only freedom (J.G.Ballard).
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