A weekend report suggesting Vodafone was caught on the hop by Virgin Media O2 terminating its MVNO deal early was, as it turns out, no surprise at all.

"Nothing new here," a VM O2 spokesperson told Light Reading. He pointed to a VM O2 notice to bondholders, posted as part of the operator's Q2 2021 financials last summer, that made clear it was severing MVNO ties with Vodafone following its joint venture agreement with Telefonica UK (O2 UK).

With O2 UK on board, boasting a nationwide UK mobile network, Virgin Media's need for Vodafone as an MVNO partner sharply diminished.

"In November 2019, we entered into a new 5-year MVNO deal with Vodafone that enabled the launch of 5G services for our mobile customers in the UK in January 2021," read the VM O2 statement. "Following the formation of the joint venture notice has been given to cancel this MVNO agreement."

Vodafone also told Light Reading there was nothing to get hot under the MVNO collar about (at least in terms of nasty surprises).

Figure 1: With O2 UK on board, Virgin Media's need for Vodafone as an MVNO partner is sharply diminished.
(Source: l_martinez/Alamy Stock Photo)

"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," said Vodafone via email.

"MVNO is a resurgent sector for us, where we've seen strong growth in recent years with our other partners."

Questions unanswered

Despite the dousing of flames, however – and Vodafone's positioning in what it calls a "resurgent" MVNO market – there are still uncertainties for the outsider looking in.

How much notice did VM O2 give Vodafone, for example, to cancel the five-year MVNO contract? What is the financial damage? Does VM O2 owe Vodafone any compensation? When will migration of customers from Vodafone to VM O2 start and finish?

No doubt a lot of this is commercially sensitive information, but long standing Vodafone shareholders – who have seen the share price halve since early 2018 – will surely be interested in it.

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— Ken Wieland, contributing editor, special to Light Reading