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Virgin Mobile (UK)

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Virgin Mobile Telecoms Limited
Company typeSubsidiary
IndustryMobile telephony
FoundedNovember 1999; 25 years ago (1999-11)
Defunct31 August 2023; 14 months ago (2023-08-31)
FateMerged with O2
HeadquartersReading, Berkshire, England, UK
ProductsMobile telephony
RevenueIncrease £563 million (2006)
Increase £66 million (2006)
OwnerVirgin Media O2
Number of employees
1,700
ParentVirgin Media
Websitewww.virginmedia.com/mobile/

Virgin Mobile UK was a mobile phone service provider. The company was launched by Virgin Group and One2One in 1999 as the world's first mobile virtual network operator (MVNO), initially using the One2One network. Virgin Mobile offered contract mobile packages, as well as mobile broadband services. It sold its services directly, as well as through price comparison sites.

NTL:Telewest bought Virgin Mobile on 4 April 2006 and rebranded itself as Virgin Media on 9 February 2007; Virgin Mobile became part of the quadplay of Virgin Media services. Virgin Media was purchased by Liberty Global in 2013, and merged with O2 in 2021. The company began transferring customers to O2 services from March 2023, and it ceased trading on 31 August 2023 upon completion of all customer transfers.[1] Existing Virgin Mobile UK customers are still legally contracted to Virgin Mobile UK, but with O2 providing the services until the end of the contract.[1]

History

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Virgin Mobile was launched in November 1999 as a private joint venture between One2One (later T-Mobile UK) and the Virgin Group.[2] The joint venture involved leasing network bandwidth from One2One and re-selling it under the Virgin Mobile brand, making it significantly cheaper to run than if Virgin operated its own network infrastructure.[3]

The company reported its first annual profit in 2003, following successful Christmas sales.[4]

In 2004 Deutsche Telekom sold their 50% holding in Virgin Mobile to the Virgin Group, with the agreement that if the company were to become public in the following two and a half years they would receive 25% of the proceeds.[5] The two companies had previously argued over the terms of the agreement made in 1999 and Richard Branson had filed a High Court action against T-Mobile.[6]

Branson had considered making Virgin Mobile public in 2002.[7] Eventually, dealing in shares of Virgin Mobile began on 21 July 2004,[8] with 37% of the shares made available for sale as an initial public offering and the rest held by the Virgin Group.[2] At the time, the company had 4.1 million customers and employed 1,400 staff in the UK; the listing valued the company at £500 million.[9]

Acquisition by Telewest, 2006

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Virgin Mobile's former headquarters in Trowbridge, England

In December 2005 it was announced that Virgin Mobile UK was in talks with NTL:Telewest regarding a sale. The combination of Virgin Mobile and NTL:Telewest would create the United Kingdom's first "quadruple play" media company, bringing together TV, broadband internet access, mobile phone and fixed-line phone services, and allowing NTL:Telewest to use the Virgin brand.

Under the deal, Virgin owner Sir Richard Branson was understood to be planning to swap his controlling 72% stake in Virgin Mobile for a 14% holding in NTL:Telewest, which would make the billionaire entrepreneur the biggest shareholder in the combined group, and give him a share of future revenues.

The first bid of £817 million (US$1.4 billion) was rejected by Virgin Mobile's independent directors, who took the view that NTL:Telewest's bid "undervalued the business." Branson was reported to be confident that a restructured deal could be completed. The offer was increased in January 2006, to £961 million, or 372 pence per share.

On 4 April 2006, NTL:Telewest announced a £962.4 million recommended offer for Virgin Mobile. The offer had three options: 372 pence per share in cash; 0.23245 new NTL:Telewest Inc. shares for each Virgin Mobile share, worth 389 pence; or 0.18596 of an NTL:Telewest share, and 67 pence in cash, worth in total 387p. Branson indicated that he would accept the third option, which led to him receiving at least a 10.1% stake in the newly enlarged NTL:Telewest, and helped to fund the increased 372p per share in cash for the minority shareholders.

The independent directors of Virgin Mobile indicated to NTL:Telewest that they "intended unanimously to recommend that Virgin Mobile shareholders vote in favour of the scheme". NTL:Telewest acquired Virgin Mobile on 4 July 2006, delisting it from the London Stock Exchange and leaving Virgin Group with a 10.5% shareholding. NTL:Telewest rebranded under the Virgin Media name on 8 February 2007. The company set up in 2004, Virgin Mobile Group (UK) Limited, became dormant and was eventually dissolved in 2020.[10]

Merger with O2 and closure

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In May 2020, it was announced that the owner of Virgin Mobile, Virgin Media, was in talks with Telefónica, owner of the O2 network, to merge the two companies. Following approval by the Competition and Markets Authority, the merger to form Virgin Media O2 was completed on 1 June 2021.[11][12] Virgin Media said that Virgin Mobile customers would see no immediate changes.[13]

In January 2023, it was confirmed by Virgin Media O2 that Virgin Mobile would close, with all customers moving from Virgin Mobile to O2; migration started in March 2023 and was completed in August 2023.[14]

On 31 August 2023, sales of new Virgin Mobile SIM only and device plans were stopped and the network ceased operations.

Services

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Virgin Mobile sells contract airtime, mobile phones and mobile broadband, marketed through Virgin Media and its high street stores.[15]

Following the 2010 merger of T-Mobile and Orange to form EE, many Virgin Media customers were able to use phones previously locked to either of these companies, although EE SIMs would not work in phones locked to Virgin. However, the merger meant Virgin Mobile customers reported losing signal as EE consolidated the coverage of the two formerly separate networks.[16] As part of the merger, Virgin Media continued the agreement with EE to use its network, and phones could roam between a formerly T-Mobile UK mast and a former Orange mast from early October 2011.[17]

In November 2016, Virgin launched 4G with new tariffs and an unused monthly data rollover feature. Users on 4G plans have free access to WhatsApp and Facebook Messenger apps by "zero-rating" until their data allowance is used in full.[18]

Virgin Mobile originally offered pay-as-you-go contracts, but in October 2019 these were closed to new customers and tariffs were increased for existing customers.[citation needed]

On 6 November 2019, it was announced that Virgin Mobile would end their 20-year contract with BT and EE, and would use Vodafone's network from 2021, initially for five years.[19] From January 2021 new customers were connected to the Vodafone network, and it was reported that existing customers would be moved from EE to Vodafone by early 2022.[20] However, following the mid-2021 merger, Virgin Media O2 stated that notice to cancel the MVNO agreement had been given, and that the company intended to bring all consumer mobile services onto the O2 network.[21]

In January 2021, Virgin Media launched 5G services using the Vodafone network.[22][23] Later that year, the company announced that their pay-as-you-go service would be discontinued between October 2021 and January 2022.[24] The transfer of all Virgin Media customers from the Vodafone network to the O2 network was completed in 2022.[14]

References

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  1. ^ a b "Virgin Mobile | Phone & SIM Deals - See What You Can Do". www.virginmedia.com. Retrieved 30 January 2024.
  2. ^ a b "Virgin Mobile reveals share range". BBC News. 7 July 2004. Retrieved 15 February 2010.
  3. ^ "Mobile users flock to Virgin". BBC News. 3 January 2002. Retrieved 15 February 2010.
  4. ^ "Virgin Mobile reports strong sales". BBC News. 23 January 2003. Retrieved 15 February 2010.
  5. ^ "Virgin Mobile on road to market". BBC News. 29 January 2004. Retrieved 15 February 2010.
  6. ^ "'Tug-of-love' over Virgin Mobile". BBC News: Business. 10 March 2003. Retrieved 10 January 2022.
  7. ^ "Branson may take Virgin Mobile public". BBC News. 8 March 2002. Retrieved 15 February 2010.
  8. ^ "Virgin Mobile plans July float". BBC News. 30 June 2004. Retrieved 22 August 2007.
  9. ^ "Virgin Mobile makes steady debut". BBC News. 21 July 2002. Retrieved 22 August 2007.
  10. ^ "Virgin Mobile Group (UK) Limited". Companies House. Retrieved 25 July 2020.
  11. ^ Fildes, Nic (1 June 2021). "Newly merged Virgin Media O2 'ready to fire' at incumbent BT". Financial Times. Retrieved 1 June 2021.
  12. ^ "Competition Authority Clears O2 and Virgin Media UK to Merge". 20 May 2021.
  13. ^ "We're Virgin Media O2 and we're upgrading the UK". Virgin Media O2. Retrieved 2 June 2021.
  14. ^ a b Jackson, Mark (11 January 2023). "Virgin Media UK Confirm Aim to Switch Virgin Mobile Plans to O2". ISPreview UK. Retrieved 11 January 2023.
  15. ^ Virgin Media Mobile - Pay as you go and pay monthly phones Archived February 9, 2010, at the Wayback Machine Virgin Media
  16. ^ T-Mobile merger creates Virgin mobile blackspots PC Pro
  17. ^ Clover, Julian (10 October 2011). "Virgin connects mobile network with Orange". Broadband TV News. Retrieved 14 April 2021.
  18. ^ "Virgin becomes last major UK 4G network". BBC News. 7 November 2016.
  19. ^ "Virgin Media UK Says Goodbye to BT, Signs Vodafone for Mobile". ISPreview UK. 6 November 2019. Retrieved 7 November 2019.
  20. ^ "Who provides the Virgin Mobile network?". The Big Tech Question. 17 February 2022. Retrieved 4 June 2022.
  21. ^ "Condensed Consolidated Financial Statements" (PDF). Virgin Media O2. 30 June 2021. pp. 19, 30. Retrieved 5 June 2022.
  22. ^ "Virgin Media launches 5G services in the UK". Virgin Media. Retrieved 2 February 2021.
  23. ^ Jackson, Mark (25 January 2021). "Virgin Media's 5G Mobile Goes Live via Vodafone UK UPDATED". ISPreview UK. Retrieved 2 February 2021.
  24. ^ Jackson, Mark (16 July 2021). "Virgin Mobile UK Moves to Scrap Pay As You Go Packages UPDATE". ISP Preview. Retrieved 30 May 2023.
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