Should the merger go ahead as planned, the new company has already pledged to invest £10 billion over the next five years. The cash is expected to be used to increase the 5G roll-out, which will become available to both Virgin Media and O2 customers, as well as expand super-fast broadband.
Virgin Media is already rolling out gigabit-capable broadband to towns and cities across the UK. These next-generation connections provide speeds up to 1,140Mbps. For comparison, the average home broadband connection in the UK right now is around 65Mbps.
Provided that Virgin Media and O2 get a thumbs up from the Competition and Markets Authority, the joint venture has now pledged to connect an extra one million homes to this gigabit-capable broadband “within 12 months of the merger closing”. Virgin Media alone has pledged to reach a target of 15 million homes by the end of this year, so this extra commitment could bring the total to 16 million by the end of 2021.
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In a joint statement about the appointment of the new CEO and CFO of the merged UK companies, Mike Fries, CEO of Virgin Media’s parent firm Liberty Global, and José Maria Alvarez-Pallete Lopez, CEO of O2 owner, Telefonica, said: “We are about to embark on an exciting new chapter for Virgin Media and O2, and Lutz and Patricia are the right leaders to deliver on our ambition to create the UK’s national connectivity champion.
“Together they will build a strong, diverse and dynamic team that will bring more choice, more value and world-class innovation to over 46 million fixed and mobile customers and the broader consumer and enterprise market. Lutz is a unique talent and a perfect fit for the new combined company. He has extensive experience in fixed and mobile and a fantastic track record at both Liberty and Telefonica driving transformation and growth.
“Together, Virgin Media and O2 will need to quickly capitalise on strategic opportunities in network expansion, digitalisation, convergence, 5G and video – all areas where Lutz has a strong background and a clear vision. We couldn’t have a better leader steering us through these critical and exciting times.”
The Competition and Markets Authority (CMA) is due to rule on the merger next month.