The parent companies of O2 and Virgin Media have pledged to create 4,000 jobs and 1,000 apprenticeships if the proposed £31 billion merger of the two organisations receives regulatory approval.
At the time the transaction was announced, Telefonica (O2) and Liberty Global (Virgin Media) pledged to invest £10 billion in network infrastructure and services without revealing too many details.
Alongside the new jobs, the two parties have promised to increase the combined firm’s gigabit broadband footprint by an additional one million premises, bringing the total figure to 16 million, within 12 months of the merger. There are also commitments to add a further seven million homes to ‘gigabit networks’ and to cover more than 100 towns and cities by the end of 2021.
“We want to create a national connectivity champion for the UK which can support the country in its digital-led recovery, by investing in the infrastructure the country needs and promoting jobs and apprenticeships to improve the digital skills base,” said Jose Maria Alvarez-Pallete, Telefonica CEO, and Mike Fries, Liberty Global CEO.
The combination of O2’s mobile infrastructure and Virgin Media’s cable network would immediately create one of Europe’s largest telecoms organisations, powering communications for nearly 40 million subscribers.
Consolidation would also result in £6.2 billion in savings and provide the scale and capability to rival BT and Vodafone in the field of converged networking services and Openreach in the wholesale market.
The deal needs to be approved by both UK competition authorities and by the European Commission (EC), which still has jurisdiction until at least the end of this year. The Commission has set itself a 5 November deadline to decide whether to approve the deal unconditionally or to start an investigation that could last up to four months.
A proposed £12.5 billion merger between Three and O2 was blocked by the EC in 2016 on the grounds that this would reduce the number of mobile operators in the UK from four to three – although Three has since successfully appealed this decision.
However, since Virgin Media and O2’s networks are complementary, any objections at a European level would presumably not be on competition grounds.
However, Telefonica and Liberty Global are using this period to disclose more details about their planned investments, hoping this will ease any lingering doubts that the deal isn’t a positive development for the sector.
Via The Times