Virgin Media O2 acquires spectrum to boost UK mobile coverage

Virgin Media O2 is acquiring spectrum from VodafoneThree that promises faster speeds and better coverage for UK mobile customers.

The £343 million deal with VodafoneThree will see Virgin Media O2 take ownership of 78.8 MHz of spectrum, boosting its total share to roughly 30 percent. This increased spectrum allocation should deliver improvements for customers frustrated by patchy coverage or sluggish data speeds.

Coming hot on the heels of the merger between Vodafone and Three UK, creating VodafoneThree, this spectrum shuffle requires the blessing of telecoms regulator Ofcom before it can be finalised. Industry watchers reckon the deal will help level the playing field, creating three properly scaled mobile operators with more balanced spectrum holdings.

The deal isn’t happening in isolation. It’s actually part of a broader arrangement hammered out between Virgin Media O2 and Vodafone in July 2024, which extended their network sharing partnership for more than a decade. Following their recent union, VodafoneThree will now join this arrangement.

For Virgin Media O2, this spectrum grab represents a commitment beyond the £2 billion they’re already ploughing into networks and services. While it won’t be an overnight transformation, UK mobile customers should notice the difference as the operator rolls out improvements to network capacity, reliability, and coverage.

However, it’s not just regular mobile users who stand to benefit. The countless smaller mobile providers who piggyback on Virgin Media O2’s infrastructure as MVNOs through wholesale agreements will also get a boost, potentially creating a ripple effect across millions of additional connections.

Funding for the purchase will partly come from Virgin Media O2’s sale of its minority stake in Cornerstone earlier this year, with payments structured to extend beyond 2025. The company plans to begin deploying the new spectrum capacity this year, though the full implementation will take place over what they’re calling the “medium term” (i.e. likely meaning several years of gradual upgrades.)

Lutz Schüler, CEO of Virgin Media O2, said: “This acquisition of spectrum will not only create greater balance in holdings across the UK’s mobile networks, but for Virgin Media O2 it will allow us to boost coverage and further improve our network quality, building on the significant investment we are already making in our mobile network.

“We’re committed to giving our customers a reliable mobile experience across the country and this increase in spectrum will help us deliver on that.”

The timing couldn’t be more interesting, landing as it does while the dust is still settling on the VodafoneThree merger. That consolidation has fundamentally altered the UK’s mobile landscape, and this spectrum deal appears to be Virgin Media O2’s counter-move to ensure it remains competitive.

All eyes are now on Ofcom, whose regulatory thumbs-up is needed before any spectrum can change hands. Given the potential upside for market competition, most analysts expect approval will be forthcoming relatively quickly.

See also: Opensignal: VodafoneThree speed vow masks consistency issue

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Tags: 5G, connectivity, europe, mobile, networks, spectrum, telecoms, uk, virgin media o2, vodafone, vodafonethree