Virgin Media O2 could cut ties on Vodafone MVNO deal

(Image credit: Vodafone)

Virgin Media O2 has reportedly given notice to end its Mobile Virtual Network Operator (MVNO) agreement with Vodafone.

MVNOs do not own their own mobile infrastructure and instead deliver services using another operator’s network. When Virgin Mobile launched in 1999, it was the world’s first MVNO and the model has since been replicated around the world.

Virgin Mobile had relied on EE’s network since then, having initially gone live with predecessors One2One, but switched to Vodafone in part because it was promised access to the full range of Vodafone technology and services – including 5G.

Vodafone consolidation

The five-year deal only came into effect last year but was signed in 2019 – before Virgin Media’s merger with O2. That deal meant Virgin Media now had access to its own mobile network, making the deal with Vodafone somewhat superfluous.

According to the Mail on Sunday, Virgin Media O2 has told bondholders that moves have been taken to end the arrangement with Vodafone four years early. 

Virgin Media O2 declined to comment to TechRadar Pro.

The decision by Virgin Media to switch from EE to Vodafone was widely seen as a coup for the latter and the development will be a blow to the Newbury-based operator, if not a surprising one.

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

Vodafone has made plenty of headlines in recent weeks, amid reports it is under renewed pressure from ‘constructive activist’ investor Cevin Capital which is said to have acquired a stake in the operator and is believed to be pushing for consolidation.

The company has confirmed talks with rivals in several European markets about possible mergers following speculation of a potential tie-up with UK rival Three in recent weeks. Vodafone has also rejected a €11 billion offer from Iliad for its Italian business.

Via Mail on Sunday

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.