Virgin Media O2 is all over the headlines – are yet more changes on the way?
The Times newspaper [subscription needed] reported that Virgin Media O2 (VMO2) is in negotiations with its larger rival, VodafoneThree, over a wholesale broadband deal. Reportedly VodafoneThree wants to increase its broadband customer base beyond the 2 million it has.
Back in November 2021, Vodafone expanded its arrangement with the CityFibre, the Great Britain’s fourth largest broadband infrastructure provider, becoming its anchor tenant and claimed the tie-up would make it Great Britain’s biggest retail provider of full-fibre broadband. Seems like it wants to accelerate progress.
VMO2’s side of the deal
VMO2, equally owned by Liberty Global and Telefonica, has long been determined to rival the UK’s biggest broadband provider, BT’s semi-detached Openreach. To these ends, it owns a 50% stake in the Nexfibre which is building wholesale fibre infrastructure for broadband in the UK. InfraVia Capital Partners owns the other 50%.
However, their grand plan to build a wholesale infrastructure to rival Openreach’s was paused by Marc Murtra, when he was brought in by the Spanish government as CEO of Telefonica Group in a boardroom coup at the beginning of 2025. The UK is described by Telefonica as one the group’s four key markets, alongside Germany, Spain and Brazil.
Nexfibre is currently in the throes of acquiring Netomnia, the UK’s fourth largest fibre infrastructure company, for £2 billion, which some commentators think is expensive. Apparently any wholesale deal between Virgin Media O2 and VodafoneThree depends on the completion of Netomnia acquisition because it would extend VMO2’s reach to about 8 million premises in the UK.
Direct control?
There have been rumours at different times about Liberty Global and Telefonica buying the other out of the company, which was formed in £31 billion merger in 2021. Interestingly, last November Murtra saw fit to set up a London-based UK Office which will report directly to Emilio Gayo, Telefónica’s Chief Operating Officer.
It will be led by Mario Martín who will also be joining VMO2’s Board of Directors. He has been with Telefónica Group for 30 years and is credited with “a remarkable track record in industrial management, strategic partnerships and value creation”. In other words, a seasoned deal maker.
Here’s what Enders Analysis said in February after 2025 earnings were released: “VMO2 ended 2025 on a slowing note, with broadband still being hit by altnets and mobile impacted by negative publicity surrounding an October pricing change [see below].
Guidance for 2026 at 3-5% declines for proforma service revenue and EBITDA looks bleak, driven by current momentum and various built-in technical factors, including wholesale payments to nexfibre.
We are not convinced that the agreed nexfibre /Netomnia deal is in any sense a panacea for VMO2’s issues, but there are other green shoots that could help the company back to growth beyond 2026.”
Not a good look
On the subject of that super unpopular price rise, according to The Telegraph newspaper [subscription required], Virgin Media O2’s (VMO2) CEO Lutz Schüler said he regrets springing a surprise 40% price increase on its mobile customers mid-contract and has been surprised by the reaction.
Last October O2 announced that mobile bills would rise by £2.50 a month – equivalent to £30 a year – from next month. That amounts to 40% (70 pence) more than higher than the £1.80 increase customers were informed about when they signed up.
O2 lost 165,000 customers in the last three months of 2025, 110,000 of whom Schüler said are direct results of the price increases. However, its total nett losses of mobile subscribers in 2025 was 397,500.
Consumer champion, Martin Lewis, who set up the hugely popular Moneysavingexpert.com vented his outrage at the price rise and encouraged customers to leave. Lewis also claimed his campaign led to VMO2 receiving a reprimand from the Chancellor of the Exchequer, Rachel Reeves, and Liz Kendall, the Technology Secretary, who asked the regulator Ofcom to review pricing in telecoms. Whether or not he was responsible, the reprimand was issued and the action taken.
O2 has said it will spend £700 million upgrading its mobile network this year. In February the operator said it has become the first operator in Europe to launch direct-to-device (D2D) satellite mobile service for data, O2 Satellite with Starlink.
