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.