Virgin Media–O2 tie up to create 5,000 UK jobs

The much-anticipated merger of Liberty Global’s Virgin Media and Telefonica’s UK wing, O2, is set to generate around 4,000 jobs, said the parent companies, noting that an additional 1,000 apprenticeship roles would be developed to help boost the future rollout of 5G.

 

Announced back in May, the £31 billion merger between O2 and Virgin Media is set to create a serious challenger for BT’s dominance, with what Virgin Media’s CEO Lutz Schuler saying at this year’s Connected Britain that they would seek to create “the national champion in quadplay”: mobile, video, fixed voice, and fixed broadband services.

 

But to really take on the likes of BT and Sky, O2 and Virgin Media say they will need a larger and more skilled workforce, particularly for the rollout of 5G.

 

“We want to create a national connectivity champion for the UK which can support the country in its digital-led recovery, by investing in the infrastructure the country needs and promoting jobs and apprenticeships to improve the digital skills base," said Jose Maria Alvarez-Pallete, chief executive of Telefonica, and Mike Fries, chief executive of Liberty Global, in a joint statement.

 

With the coronavirus taking hold once again in the UK and widespread lockdowns seeming more and more likely, as well as the furlough scheme set to finish at the end of this month, unemployment could be set to skyrocket leading into 2021. With the Virgin Media–O2 merger also promising an investment of £10 billion into the rollout of 5G, it is clear that this news of additional job creation could not come at a more needed time for the UK. 5G has long been pegged as a staple for the UK’s economic recovery and job creation is one of the many ways in which the new technology could pay dividends.

 

However, we should also take merger job creation promises with a pinch of salt. It is very much par for the course for companies to stress the job creation potential of their mergers to help curry favour with regulators, only fail to deliver after new synergies actually result in a reduction of total jobs. That said, given the nature of this merger – combining a mobile operator with a fixed operator – there should be less operational cross over than typically expected, so this cynical viewpoint may be unwarranted.  

 

The merger is currently pending regulatory approval, with the European Commission announcing just last week a deadline of the 5th of November to complete its initial review. If all goes to plan, the deal should close in the middle of 2021.