Virgin Media & O2 Merger/Joint Venture Provisionally Approved

[jonnie]

I had an e-mail from O2 yesterday.

I reckon this will very much be a EE type situation where they say both brands are sticking around but ultimately one of them will win out over the other. My money would be on O2. The licencing agreement Liberty have with Richard Branson is money that could be spent better elsewhere - I also don't think the Virgin brand is as strong as it may have been previously in terms of reputation.

The Virgin Mobile situation complicates things though as they've recently entered in to an agreement to switch their customers from the EE network to Vodafone, which presumably they will have to honour, so it'll be interesting to see how that plays out.

[i.h]

I had an e-mail from O2 yesterday.

I reckon this will very much be a EE type situation where they say both brands are sticking around but ultimately one of them will win out over the other. My money would be on O2. The licencing agreement Liberty have with Richard Branson is money that could be spent better elsewhere - I also don't think the Virgin brand is as strong as it may have been previously in terms of reputation.

The Virgin Mobile situation complicates things though as they've recently entered in to an agreement to switch their customers from the EE network to Vodafone, which presumably they will have to honour, so it'll be interesting to see how that plays out.

The "EE type situation" is that there are multiple brands. You can see that BT Group is positioning the BT brand for premium broadband/landline/TV and EE for premium mobile. BT mobile and EE home broadband are the poor relations with fewer bells and whistles (e.g. BT mobile doesn't have eSIM), and you're even directed towards the other brand if you want that stuff. Plusnet is somewhere in between.

O2 doesn't do home broadband (anymore) so there's no duplication. It will be interesting to see what they do with Virgin Mobile, though. BT had a similar MVNO arrangement with Vodafone though IIRC they were already switching over to EE before they ended up buying them.

Will be even more interesting to see what Sky does when their deal with O2 is up - do they want to buy services from their biggest TV competitor?

[London Lite]

I wonder if the new group would sell the MVNO business which then would leave the cable part of the business selling O2 contracts as part of the package?

If the new company went under the O2 moniker, this would allow another company to keep the Virgin Mobile brand license or rebrand which would allow their existing customers to stay with them instead of moving to O2.

[James Martin]

I too wonder how long they'll hang onto Virgin for as a brand. Unfortunately, the Virgin brand name doesn't have the sexy reputation it did in the 90's, when the products were all about adding value, and the points of difference aren't as big now - when VM began VOD on your television was a fairly new thing, broadband was mostly ADSL, etc. Now, Sky and others have been able to catch up.

[moramento22]

In terms of the branding I think they should come up with a completely new one. Just like Orange and T-Mobile did with EE. That's because the Virgin brand is tainted in UK. Despite the fact that companies like Virgin Trains East Coast have so much to do with Virgin Media, as Transpennine Express has to do with EE, but still it's the same branding.

In terms of the MVNO, I don't think they'll get rid of it, BT didn't get rind of BT Mobile they just changed the network to EE. Of course for Virgin Mobile it's gonna take a while because of that recent deal they struck with Vodafone, and I don't think Vodafone will let it be ended early.

[James Martin]

That's the risk of licensing the Virgin name. For example
their IFE on their planes was streets ahead of their competition with personal TVs in economy! Even when they had six VHS (some newer planes used Video8) tape loops on a 3" LCD on their oldest planes, which were flying as late as 2001 - it beat getting neckache trying to watch one film on the big RGB projector on the bulkhead.

Now everybody's got VOD on longhaul it's not a point of difference anymore.

See also onboard massages, onboard bar in business, flat seats in business, premium economy class... they were the first but everyone else caught up. In BA's case they did flat business beds better and Virgin had to have a massive rethink just three years down the line.

Same with the trains that had at-seat radios and a number of other airline style touches - now everyone's doing it (I remember using an airline style VOD system on a First Great Western train in 2012 and thinking what a brilliant idea.)

So for me I used to think of the brand Virgin as "point of difference." Now, that doesn't happen - and I wonder if Richard licensing out the brand has been a good idea if you don't have personal control over the product.

[EastAnglian]

I'd like to think O2 will be the brand that survives the merger as Liberty Global currently have to pay a licensing fee to Virgin for the use of the brand for their cable and mobile businesses.

Although if they want to have the UK and Ireland parts the same that'll be tough, since O2 sold out to Three in Ireland so O2 probably isn't going to be open to them for the Irish division.

[XIII]

Virgin Media O2 sounds really clunky and I suspect a new name will be on the cards within the next few months. If they can't use O2, maybe Oxygen Media might be an option if it's not being used already.

[jonnie]

Virgin Media O2 sounds really clunky and I suspect a new name will be on the cards within the next few months. If they can't use O2, maybe Oxygen Media might be an option if it's not being used already.

Or even just O2 Media?

[JetixFann450]

Virgin Media O2 sounds really clunky and I suspect a new name will be on the cards within the next few months. If they can't use O2, maybe Oxygen Media might be an option if it's not being used already.

Or even just O2 Media?

O2 Media sounds like the company itself and not a public name. If anything, it'd likely be O2 generally for Phone, Broadband and TV. O2 TV already exists in the Czech Republic, so there would probably be no problem introducing that to the UK.

[jonnie]

I actually think O2 is the stronger of the two brands anyway so it makes more sense to keep it. Virgin have a horrible reputation for customer service where as O2 I think generally seem to do pretty well in that department - as a customer of both, I know which I'd rather deal with.

[Rdd]

I'd like to think O2 will be the brand that survives the merger as Liberty Global currently have to pay a licensing fee to Virgin for the use of the brand for their cable and mobile businesses.

Although if they want to have the UK and Ireland parts the same that'll be tough, since O2 sold out to Three in Ireland so O2 probably isn't going to be open to them for the Irish division.

The Irish subsidiary is staying Virgin Media for now, and will revert to being part of UPC Broadband organisationally wise. Mike Fries has said they want to do a similar deal in Ireland but has since retreated from those comments. I think there could be problems doing a deal of this type in Ireland because basically there’s three mobile networks, one of which (eir) will not be allowed buy into VM for competition reasons (because they’re the incumbent landline operator too) and one of which (Three) has shown no interest so far in anything other than being a mobile company. That leaves Vodafone as the only possible candidate, and they know that too.

[mici01]

The Irish subsidiary is staying Virgin Media for now, and will revert to being part of UPC Broadband organisationally wise. Mike Fries has said they want to do a similar deal in Ireland but has since retreated from those comments. I think there could be problems doing a deal of this type in Ireland because basically there’s three mobile networks, one of which (eir) will not be allowed buy into VM for competition reasons (because they’re the incumbent landline operator too) and one of which (Three) has shown no interest so far in anything other than being a mobile company. That leaves Vodafone as the only possible candidate, and they know that too.

TBH the same was true in the Netherlands and Liberty and Vodafone managed to find a solution there, too. Beside Vodafone NL you had KPN (incumbent landline operator, same situatuon as eir) and T-Mobile who just bought the countries biggest fibre operator and we're hevily invested in that.

Liberty might also just sell VM Ireland to Vodafone like they did with their operations in Germany, Czechia, Hungary and Romania (if VF can pony up the cash that is).

[Rdd]

I think that’s probably what will eventually happen too - it’s just that if Vodafone think Liberty are keen on a sale and have no other takers they’ll probably be in a position to dictate terms. Never a good position to conduct a negotiation from if you’re the seller.

[WillPS]

https://www.ispreview.co.uk/index.php/20...dband.html

This is interesting - VM are trialling a basic broadband offer with a monthly subscription of £0.00.