John Malone’s Liberty Global is holding talks that could lead to a merger between cablenet Virgin Media and mobile operator O2.
If a deal is pursued the most likely route would be form a joint venture that would merge O2, owned by the Spanish Telefónica with Virgin Media. Liberty Global would then make a payment to Telefónica that would ensure the new company is owned equally by the two businesses.
The O2 mobile network is the largest in the UK with 34 million customers including the Tesco Mobile and Giffgaff.
Virgin Media runs an MVNO that is currently operated by BT Enterprise. It will move to Vodafone when the present contract expires in 2021.
Virgin Media has 5.27 million broadband subscribers, 3.69 million TV subs and 3.18 million mobile telephony customers.
Liberty Global, through its European venture Liberty Media, has been gradually moving away from control of its operations.
Much of its former fortress, such as Germany’s Unitymedia, has been sold to Vodafone, with who it runs the Vodafone-Ziggo JV in the Netherlands. The British telco was seen as a potential suitor for its operations in the UK and Ireland.