Virgin Mobile Could Ditch Vodafone’s Network for O2

Virgin Media could soon terminate a multi-year deal it signed in 2019 to use Vodafone’s network for Virgin Mobile in favour of an earlier transition to merger partner O2, according to reports.

The Mail on Sunday reported over the weekend that Virgin Media has already ducked out of the five-year deal with Vodafone, which was supposed to see its mobile arm, Virgin Mobile, use the network until the end of 2026.

In a letter to bondholders, Virgin Media said “notice has been given to cancel this agreement.”

With three million customers, Virgin Mobile is the second-largest of the UK’s largest mobile virtual network operators (MVNOs), after Tesco Mobile. MVNOs don't own their own network infrastructure but rather piggyback on one of the country’s four mobile networks: EE, O2, Three, or Vodafone.

For twenty years, Virgin Mobile used EE’s network. But in late 2019, Virgin Media ditched its longtime partner for a fresh five-year deal with Vodafone, which it said would give it access to a full range of services including 5G and unlimited data plans.

At the end of 2021, Virgin Mobile customers were switched over to Vodafone’s network. Because Virgin Mobile operates as a “deep MVNO,” with control of SIM cards, customers didn’t have to swap out their SIM cards, as Asda Mobile customers did last year when their provider jumped from EE to Vodafone. But they may have noticed that their mobile coverage in some areas changed.

But between inking the deal with Vodafone and moving customers onto its network, Virgin Media had found a new partner: O2. In a £31 billion deal completed in the spring of 2021, Virgin Media and O2 merged to create a quadruple-threat telecoms giant. The merger made the deal with Vodafone superfluous.

Despite that, the newly-created VMO2 stated last year that the agreement with Vodafone would go ahead. 

But just months later, VMO2 revealed its ambitions to become a quad-play provider (broadband, TV, landline, and mobile) when it launched its Volt bundles, packaging Virgin Mobile and O2 products together. Currently, Virgin Mobile tariffs can’t be bundled in the same way.

Having Virgin Mobile on O2’s network would streamline VMO2’s offerings and open up more opportunities to create quad-play bundles.

Now Vodafone says that VMO2 made moves to terminate the contract shortly after the merger completed last year. Vodafone also gave a timeline for when Virgin Mobile customers can expect to see their service moved over to O2’s network: “later this year.”

“Notice was given by Virgin Media back in June 2021, when their merger completed, and we expect to support the majority of their three million plus customers on our network until later this year,” a Vodafone spokesperson told Tech Radar Pro.

"MVNO is a resurgent sector for us, where we’ve seen strong growth in recent years with our other partners,” the spokesperson added.

Vodafone continues to provide network services for Asda Mobile, Lebara Mobile, and its own brand VOXI.