Mobile operator O2 is in talks to merge with Virgin Media in a move which would create one of the UK’s largest telecoms and media firms.
Telefonica, O2’s Spanish owner, confirmed it is in discussions with Virgin-owner Liberty Global over a deal between the two firms.
It stressed that it is currently in the “negotiation phase”, and it is not guaranteed that the two parties will agree a deal.
A tie-up between the two companies would create a major rival for BT, which owns EE, the UK’s second largest mobile network.
![Virgin Media](http://image.assets.pressassociation.io/v2/image/production/f62effeb5552e5523df974d03c491b44Y29udGVudHNlYXJjaCwxNTg4Njc0OTY1/2.49144436.jpg?w=640)
It would bring together O2’s 34 million customers on its mobile network with Virgin’s 5.3 million broadband, pay-TV and mobile users.
O2 – which also provides the network for GiffGaff, Tesco Mobile and Sky Mobile – is the UK’s largest phone company.
Telefonica has been examining options for the O2 business since 2016, after a planned takeover by CK Hutchinson – which owns fellow mobile operator Three – was blocked by European competition regulators.
Talks between O2 and Virgin Media also raise questions over the future of Virgin’s mobile operations, which were due to be taken over by Vodafone later this year.
In November, Vodafone won the five-year contract from BT-owned EE.
Paolo Pescatore, tech and media analyst at PP Foresight, said: “This is an intriguing move.
“For sure, it is more likely to appease regulators than two mobile operators coming together.
“Also, let’s not forget the parents of both companies have been keen to offload these assets for a while.
“Therefore, there is more to this than simply convergence and competing with BT and Sky.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here