The American company Liberty Global and Telefónica have announced the merger of their respective businesses in the United Kingdom. The result is a 50% joint venture by each of the companies that will lead the British telecommunications market.
“Combining O2, the UK’s number one mobile operator, with Virgin Media’s high-capacity broadband network and entertainment services marks a turning point in the British market, at a time when demand for connectivity It has never been so high, nor so critical. We are creating a strong competitor, with a significant scale and financial strength, to invest in digital infrastructures in the United Kingdom, offer more options and provide greater value to millions of consumers, companies and clients in the sector. Today, a leading convergent operator is created in the United Kingdom, which is a source of pride for both partners, “said José María Álvarez-Pallete, CEO of Telefónica.
Synergies between Telefónica and Liberty
The synergies between the two companies are multiple. On the one hand, Virgin customers will switch to using the O2 mobile network, which entails significant savings for the company, which until now rented the BT (British Telecom) network. On the other hand, O2 will be able to use Virgin Media’s fiber optic networks not only to provide fixed broadband services to its customers, but also to strengthen the operator’s 5G network structure.
The O2 and Virgin businesses are also complementary. The Telefónica operator has its strength in mobile telephony services. Meanwhile, the Liberty Global company stands out in fixed broadband services and video services. The union of both will open the door to new combo packages like those that Movistar currently offers in Spain (Movistar Fusión).
The closing of the operation is expected to occur in mid-2021 after receiving the green light from the different regulatory bodies. The resulting company will have a value, according to published data, of £ 38 billion. Regarding the total number of clients, the joint venture between the two companies will have approximately 46 million subscribers. British Telecom (BT), until now the leader in the British market, will be relegated to second place in terms of market share.
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