Virgin Media O2 to axe thousands of jobs

[Itshim]

Told hedge funds are looking in the US at that end , so who knows

[Pierre]

Originally Posted by jem

Two to three years? Four maybe, at a push.

Well, it’s owned by two massive companies, that have a lot invested in it…….too much to see it fail in that space of time.

Change it will …..go under…….it won’t.

If it all went completely south, and that is an apocalyptic if, you have three scenarios.

1. The creditors take control, the ones holding the £22billion that are now screwed, take over and try to some return, just like going into administration really.

2. The shareholders, LG and Telefonica, decide it can be rescued and is still viable and put in a cash injection.

3. Broken up and sold……tough one. O2 mobile is a going concern, the VM fibre network also good………but who wants the HFC?…..

Worrying times.

Poor decisions, I think now it has dawned that overlaying the HFC network with fibre, was a monumental error, and one that could kill the company. They should have focused on expansion, sell the HFC at a price that could compete with crazy Altnet discounts.

There is a way through this, the Altnet situation is very precarious, and they will eventually be wither or be consumed.

But the CMA evidently have no idea of how the U.K. fibre market has evolved, or indeed devolved.

The NexFibre acquisition of netomnia is a funded transaction that will see a cash injection into VMO2, through a sale of some it’s network, that would at least keep several hundred jobs at VMO2 for at least 12 months.

If the CMA block the netominia deal they will just be handing the entire U.K. telecoms sector to BT OpenReach ………..well done.

[Itshim]

Originally Posted by Pierre

Well, it’s owned by two massive companies, that have a lot invested in it…….too much to see it fail in that space of time.

Change it will …..go under…….it won’t.

If it all went completely south, and that is an apocalyptic if, you have three scenarios.

1. The creditors take control, the ones holding the £22billion that are now screwed, take over and try to some return, just like going into administration really.

2. The shareholders, LG and Telefonica, decide it can be rescued and is still viable and put in a cash injection.

3. Broken up and sold……tough one. O2 mobile is a going concern, the VM fibre network also good………but who wants the HFC?…..

Worrying times.

Poor decisions, I think now it has dawned that overlaying the HFC network with fibre, was a monumental error, and one that could kill the company. They should have focused on expansion, sell the HFC at a price that could compete with crazy Altnet discounts.

There is a way through this, the Altnet situation is very precarious, and they will eventually be wither or be consumed.

But the CMA evidently have no idea of how the U.K. fibre market has evolved, or indeed devolved.

The NexFibre acquisition of netomnia is a funded transaction that will see a cash injection into VMO2, through a sale of some it’s network, that would at least keep several hundred jobs at VMO2 for at least 12 months.

If the CMA block the netominia deal they will just be handing the entire U.K. telecoms sector to BT OpenReach ………..well done.

Hence hedge fund interest. Drive price down , jump in , break up. Cash in.

[jem]

Originally Posted by Pierre

Well, it’s owned by two massive companies, that have a lot invested in it…….too much to see it fail in that space of time.

Change it will …..go under…….it won’t.

If it all went completely south, and that is an apocalyptic if, you have three scenarios.

1. The creditors take control, the ones holding the £22billion that are now screwed, take over and try to some return, just like going into administration really.

2. The shareholders, LG and Telefonica, decide it can be rescued and is still viable and put in a cash injection.

3. Broken up and sold……tough one. O2 mobile is a going concern, the VM fibre network also good………but who wants the HFC?…..

Worrying times.

Poor decisions, I think now it has dawned that overlaying the HFC network with fibre, was a monumental error, and one that could kill the company. They should have focused on expansion, sell the HFC at a price that could compete with crazy Altnet discounts.

There is a way through this, the Altnet situation is very precarious, and they will eventually be wither or be consumed.

But the CMA evidently have no idea of how the U.K. fibre market has evolved, or indeed devolved.

The NexFibre acquisition of netomnia is a funded transaction that will see a cash injection into VMO2, through a sale of some it’s network, that would at least keep several hundred jobs at VMO2 for at least 12 months.

If the CMA block the netominia deal they will just be handing the entire U.K. telecoms sector to BT OpenReach ………..well done.

No I wasn’t suggesting that the entire company will go bust and cease trading, more of how long it will continue in its current state. And I still think 3-4 years, it’ll either be bought out or broken up - probably both.

Yes I fully agree. the altnets (well most of them) have no long-term future, I suspect most of them are just aiming to be bought out by a bigger player.

[Chrysalis]

To be fair to the CMA its not their responsibility to keep VM afloat or for people to keep their jobs, these jobs would have gone regardless, the merger may have delayed it. But I have never seen a merger that doesnt involve job losses, that would be a new thing if that was the result.

The CMA need to look at the resulting competition, and here is my 5 pence on the issue.

VM have a poor record of being competitive, their one advantage was they had for a while a superior technology over the copper DSL competition. Thats it really, they treated loyal customers poorly, didnt wholesale their network, routinely for years on end left areas with very visible congestion knowing that the customers had a choice of that or slow DSL.

BT/Openreach even if is as a result of Ofcom intervention, wholesale'd both the local loop and core network. Reacted to alt net competition by doing a national rollout, this FTTP rollout was also available to wholesale partners.

VM and its partner invested in a new Nexfibre company, a limited rollout was started with similar ambition to CityFibre a completely new player, unlike CityFibre there was no wholesale, the only other ISP was GiffGaff owned by the owners of VM.

They reacted very differently to OR on the alt net threat by tabling a over priced bid designed to kill the competition, American style. This bid coincidentally shortly after CityFibre and Netomnia were in talks of a merger.

If the CMA has competition and customer's at its forefront, the logical move would be to block the anti competitive buying out from Nexfibre, and instead promote the CityFibre/Netomnia merger which was a more natural progression in the market, both networks tiny over lap, and the combined size of them would result in a lng term player in the market.

The resulting competition is much better with the latter, as CityFibre already have an established wholesale market. So people in the affected areas, would have an extra 20 or so ISPs to choose from, and the likes of Sky, Zen etc. would have a choice of two wholesale providers instead of just Openreach.

This is the view point when you try not to tint it with sorrow for VM job losses, and those who were hoping to make a quick buck from the VM bid.

But the CMA havent rejected the deal yet, this could be a starting negotiation point, especially if the government step in stating they would prefer this buy out to go ahead.

The threats from LG and VM ceo's made one thing very clear, they dont like being in a competitive market, so they threatened to back out of any investment unless they had a dominant market.

[jfman]

None of them like being in a competitive market, that’s why they (private equity) are sinking billions into telecoms where the outcome is oligopoly pricing underpinned by regulation on the incumbent. This is true whether we end up with two or three players in the market at network level with pretend competition on the retail side.

Pretending that the market will sustain more competition than it can will only exacerbate the sub-optimal allocation of resources (build) with the state having to pony up the difference for rural build through Project Gigabit.

[gunner45]

Originally Posted by Chrysalis

To be fair to the CMA its not their responsibility to keep VM afloat or for people to keep their jobs, these jobs would have gone regardless, the merger may have delayed it. But I have never seen a merger that doesnt involve job losses, that would be a new thing if that was the result.

The CMA need to look at the resulting competition, and here is my 5 pence on the issue.

VM have a poor record of being competitive, their one advantage was they had for a while a superior technology over the copper DSL competition. Thats it really, they treated loyal customers poorly, didnt wholesale their network, routinely for years on end left areas with very visible congestion knowing that the customers had a choice of that or slow DSL.

BT/Openreach even if is as a result of Ofcom intervention, wholesale'd both the local loop and core network. Reacted to alt net competition by doing a national rollout, this FTTP rollout was also available to wholesale partners.

VM and its partner invested in a new Nexfibre company, a limited rollout was started with similar ambition to CityFibre a completely new player, unlike CityFibre there was no wholesale, the only other ISP was GiffGaff owned by the owners of VM.

They reacted very differently to OR on the alt net threat by tabling a over priced bid designed to kill the competition, American style. This bid coincidentally shortly after CityFibre and Netomnia were in talks of a merger.

If the CMA has competition and customer's at its forefront, the logical move would be to block the anti competitive buying out from Nexfibre, and instead promote the CityFibre/Netomnia merger which was a more natural progression in the market, both networks tiny over lap, and the combined size of them would result in a lng term player in the market.

The resulting competition is much better with the latter, as CityFibre already have an established wholesale market. So people in the affected areas, would have an extra 20 or so ISPs to choose from, and the likes of Sky, Zen etc. would have a choice of two wholesale providers instead of just Openreach.

This is the view point when you try not to tint it with sorrow for VM job losses, and those who were hoping to make a quick buck from the VM bid.

But the CMA havent rejected the deal yet, this could be a starting negotiation point, especially if the government step in stating they would prefer this buy out to go ahead.

The threats from LG and VM ceo's made one thing very clear, they dont like being in a competitive market, so they threatened to back out of any investment unless they had a dominant market.

We need to take a realistic view of CityFibre: like most altnets it's in trouble, struggling with a debt pile of £3.8bn and needing its creditors to take a severe £2bn 'haircut' to get its £900m shareholder loan to survive. In all likelihood those creditors will choose the least undesirable option: walk away from a big part, like £1bn, but demand a debt-for-equity swap for the remaining £1bn and take control of Netomnia. The strategy will then be to stabilise, scale and sell the business within a 3- to 5-year window. Commercial debt syndicates are not long-term infrastructure operators like InfraVia which is funding the nexfibre bid to buy Netomnia: converting debt to equity is not easy as it incurs heavy regulatory capital charges but it is a protective measure to take control, cut cash burn, clean up the capital structure, and engineer a profitable exit. It's not credible at all that these new shareholders will attempt to buy Netmonia for which nexfibre bid £2bn.

The CMA should realise that CityFibre buying Netomnia to become a major competitor is just fantasy and allow the nexfibre deal.

[Chrysalis]

It isnt fantasy though, and they dont have 22 billion of debt.

There seems to be a ideology that we must stick with VM and OR, and that the efforts to bring new companies in to the mix are a bad idea. If CityFibre and Netomnia combine they will survive and be around for a while. But more importantly this will be a better deal for the consumer, and increase competition.

I would say this VM deal needs blocking no matter what. It simply cannot be allowed to happen, unless VMO2 is forced to not be part of NexFibre. Meaning its a genuine new player like CityFibre is.

So even if Cityfibre didnt merge with Netomnia its preferable to keep Netomnia as it is than to let VMO2 get its grubby hands on it.

So either block the deal, and see what happens with Cityfibre, or approve the deal on the condition VMO2 sells its shares first.

The suggestion that CMA should throw its remit out the window because VMO2 is preferred as a political choice because the brand is established, we may as well not even have a regulator, if that takes priority.

[Pierre]

Originally Posted by Chrysalis

I would say this VM deal needs blocking no matter what. It simply cannot be allowed to happen, unless VMO2 is forced to not be part of NexFibre. Meaning its a genuine new player like CityFibre is.

VMO2 is not part of Nexfibre.

I think there is a general misunderstanding of the VMO2 / Nexfibre relationship.

VMO2 and Nexfibre are part of the same group, and have the same parent companies LG & Telefonica (Except Nexfibre also have Infravia), but they are not the same company.

It is not VMO2 buying Netomnia it is Nexfibre

VMO2 build and maintain the Nexfibre network, and VMO2 are a wholesale customer on it, but they don't own it.

[SnoopZ]

Originally Posted by Sirius

Looks like i will be one of those as i will take voluntary redundancy should it be offered. I was expecting to retire next year anyway.

https://news.sky.com/story/virgin-me...ke-up-13606062

Are you 1 of the ones getting made redundant? If so I hope they accept your voluntary as it's perfect timing for you.