The agreement will see Virgin Media O2 acquire spectrum from Vodafone. This will help Vodafone gain regulatory approval for its merger with Three.

Data Center Dynamics reported the £15 billion ($28 billion) merger is currently under investigation by the UK’s Competition and Markets Authority.

UK-based publication The Standard reported that in June last year, Vodafone and Three announced they would merge their UK businesses that would become “the country’s biggest mobile network operator” with around 27 million customers.

The telecoms’ parent company, CK Hutchison Group Telecom Holdings, plans to create a new entity. Vodafone will seize a 51% stake while CK Hutchison 49%.

The report added the proposal passed its first regulatory hurdle after the UK Government did not stand in its way following a detailed national security review.

However, the proposal may still be rejected after the European Commission blocked a previous merger between Three and O2 in 2016.

“This new agreement with Vodafone ensures that quality mobile network choice, performance, coverage and competition is enhanced to the benefit of millions of consumers, businesses and our mobile operator partners across the country. We are extending and bolstering elements of our existing network sharing arrangement, while also ensuring there is a robust, balanced, and functional structure in place for the long-term should Vodafone and Three’s proposed merger gain consent,” said Virgin Media O2 CEO Lutz Schüler.

“We believe that this new agreement addresses the issues we have voiced and the CMA outlined in its initial decision, and will now continue our engagement with the regulator in this spirit.”

Data Center Dynamics reported O2 and Vodafone previously established a 50:50 network sharing agreement joint venture that aimed to support rollout of 4G and 5G network coverage.

Virgin Media O2 was formed from a merger between Virgin Media and O2 in 2021.

“With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK for the long-term, providing significant network improvements including more choice, better quality and greater coverage across the country,” said Vodafone European markets CEO Ahmed Essam.

This first appeared in the subscription newsletter CommsWire on 04 July 2024.