BT slumps as Virgin Media switches mobile network to Vodafone

Lutz Schüler

Lutz Schüler

The agreement will replace Virgin Media's current deal with BT and means Virgin Mobile services, including its 5G capability, will be hosted on the Vodafone network. There are now three million Virgin Media mobile customers, and a portion of them will have even chosen Virgin as they know it uses the EE network - with its coverage and performance in mind - accompanied by very some competitively priced packages.

A source close to BT said the company was not prepared to offer Virgin the mix of technology and data it wanted at the price it was willing to pay.

"This gives BT plenty of time to mitigate the issue by adjusting investment plans and reduces 5G capex risk", said Dellis.

BT's shares closed down 4.7% on Wednesday. Vodafone was up 0.7% at 163.16p.

Vodafone will supply wholesale mobile services including voice and data to the Virgin Mobile and Virgin Media Business customers under the deal, which runs until 2026.

Virgin Mobile services will begin the transition to Vodafone at this point, however there will be an early launch for the next generation 5G services.

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"That represents a material strategic shift for Vodafone, which previously stressed the importance of not allowing MVNOs to undermine retail pricing levels", he said.

The Virgin Media press release notes that as a "full MVNO" Virgin will have full control of the products and services it offers and existing customers should be smoothly transitioned without need to change SIM cards.

Vodafone had largely shunned major MVNO in its home market, unlike rivals such as BT's EE and Telefonica's O2, which provides the network for Tesco Mobile and Sky Mobile.

Nick Jeffery, Vodafone UK CEO, said: "We are delighted that Virgin has recognised the huge investments we've made, and continue to make, in building the UK's best mobile network and our role in challenging the market with new commercial services". Virgin's parent company Liberty Global and Vodafone have discussed "asset swaps" in the past, discussions which led to a joint-venture in the Netherlands, while Vodafone has since purchased Liberty's central European cable assets.

BT said Virgin remained a highly valued customer.

"Twenty years ago Virgin Mobile became the world's first virtual operator and this new agreement builds on that heritage", he said.

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