British telecommunications company, Virgin Media, has now been given green signal by the Competitions and Marketing Authority (CMA) to resume its process for O2 merger. The transaction demand has been finalized at 31 billion pounds.
Apparently, the deal anticipates to see two of the leading telecom giants join forces, affecting around 40 million UK households. Moreover, it would also observe all 14,000 Virgin Media employees and 6,700 O2 staff in the United Kingdom work under the same company.
Importantly, O2’s parent company, Telefonica had earlier announced that these companies were in talks to merge, CMA nod to which was recently offered. In fact, the merger is likely to create direct rivalry for BT post its purchase of EE in 2016.
At the time when the merger deal was announced, Virgin Media and O2 announced that they were planning to build a full converged platform for consumers while promising an investment of 10 billion pounds over the next five years.
Both the companies are yet to comment on how the deal could impact customers globally, but when the tie-up was first declared, they said it could mean lower prices; thanks to cost savings the business can make.
Meanwhile, the bosses have also claimed that the merger could speed up the rollout of 5G networks giving customers better value as it would be better placed to compete with rivals.
Martin Coleman, CMA panel inquiry member, quoted that both Virgin Media and O2 are important suppliers of services to other organizations who cater their offerings to millions of consumers. He added that it was quite important for the authority to make sure that the merger would not leave these people worse off, which is why the nod to this collaboration took long time.
Martin further mentioned that having a close look at the deal reassured CMA that the competition amongst mobile communications providers will remain strong and its therefore unlikely that the acquisition would lead to lower quality services and higher prices.