Virgin Media O2 has cancelled a mobile phone deal, delivering another blow to Vodafone boss Nick Read. The pair had agreed a five-year deal, running from January 2021, to launch 5G services for Virgin Mobile’s three million customers.
A five year deal had been agreed between Virgin and Vodafone where Virgin Media would have access to the full range of Vodafone technology and services, including 5G. The agreement ended a 20-year relationship with BT-owned EE.
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.
However, in a surprise letter to bondholders, Virgin said ‘notice has been given to cancel this agreement’.
“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 said.”
“MVNO is a resurgent sector for us, where we’ve seen strong growth in recent years with our other partners.”
Virgin Media completed a £31billion tie-up with O2 last year, prompting speculation that Vodafone would be replaced. The switch could begin as early as this year – well before the scheduled 2026 end date. Analysts at Enders said it could represent a ‘substantial’ hit to Vodafone’s profits.
