Virgin Mobile Operations (NYSE: SPCE) have ended a contract with BT (LON: BT.A) to pursue a new partnership with Vodafone (LON: VOD) in running its mobile network infrastructure.
Only a few days ago, Vodafone had announced structural changes to their global business operations, and this new deal will be pleasing for senior management as Virgin leave a major competitor in BT.
The partnership between BT and Virgin Media had lasted over two decades and the change that Virgin media made shows a signal of intent in a highly competitive technology market.
Virgin Media will release their new 5G network in the coming months, which will be supported by Vodafone’s mobile infrastructure network.
Rivals such as O2 (NASDAQ: OIIM) have formed partnerships with EVR Holdings (LON: EVRH) to launch their new 5G mobile network.
The deal between BT and Virgin is set to end in late 2021, and future planning has been made by Virgin to ensure that they continue to deliver quality and exceptional service to their global customer base.
Full Virgin Mobile services will start to move across to the Vodafone network from then, but Virgin Mobile 5G products will launch on Vodafone in the “near future”, the companies said.
The deal is set to affect more than three million mobile customers, and could have mutual benefits in both companies for existing and new customers.
The new Mobile Virtual Network Operator (MVNO) agreement will see Vodafone supply wholesale mobile network services, including voice and data, to Virgin Mobile and Virgin Media Business.
Virgin Media chief executive Lutz Schuler said: “This agreement with Vodafone will bring a host of fantastic benefits and experiences to our customers, including 5G services in the near future.
“Twenty years ago Virgin Mobile became the world’s first virtual operator and this new agreement builds on that heritage. It will open up a whole new world of opportunity for Virgin Media as we focus on becoming the most recommended brand for customers and bring our mobile and broadband connectivity closer together in one package for one price.
“We’ve worked with BT to provide mobile services for many years and will continue to work together in a number of areas. We want our customers to have a limitless experience – it’s now the right time to take a leap forward with Vodafone to grow further and faster.”
Vodafone UK chief executive Nick Jeffery said: “We are delighted that Virgin has recognised the huge investments we’ve made, and continue to make, in building the UK’s best mobile network and our role in challenging the market with new commercial services. As a result, they have chosen us to work with them in the next phase of their development.
“This is an exciting deal between two great British brands. We are combining our strong heritage in innovation to create a world without limits for our customers through unlimited data offers and 5G.”
