VM General News Thread

[Gavin-D]

Virgin Media O2 have made a £3bn opening offer for TalkTalk

https://news.sky.com/story/virgin-me...ktalk-12652429

[1andrew1]

Originally Posted by Gavin-D

Virgin Media O2 have made a £3bn opening offer for TalkTalk

https://news.sky.com/story/virgin-me...ktalk-12652429

Interesting! Ironically, VM sold its non-cable customer base to TalkTalk seven years ago.

I wonder what the CMA will make of it?

Thanks for posting.

[Pierre]

Originally Posted by Gavin-D

Virgin Media O2 have made a £3bn opening offer for TalkTalk

https://news.sky.com/story/virgin-me...ktalk-12652429

I can only assume this to be a customer grab. Talk Talk doesn’t have any infrastructure of interest to VMO2? They don’t have their own fibre network. They sold their FTTH operation “Fibrenation” to City Fibre a couple of years ago.

It’s not like you buy the customer base, transfer them onto your network and shut down the TT network, making savings that way. The OR and VM networks are not cross compatible by tech or footprint.

VM don’t want to be, and are not, an OpenReach FTTC reseller, they binned their own plans for that when LG bought them.

Interesting, look forward to seeing how it develops.

[1andrew1]

Originally Posted by Pierre

I can only assume this to be a customer grab. Talk Talk doesn’t have any infrastructure of interest to VMO2? They don’t have their own fibre network. They sold their FTTH operation “Fibrenation” to City Fibre a couple of years ago.

It’s not like you buy the customer base, transfer them onto your network and shut down the TT network, making savings that way. The OR and VM networks are not cross compatible by tech or footprint.

VM don’t want to be, and are not, an OpenReach FTTC reseller, they binned their own plans for that when LG bought them.

Interesting, look forward to seeing how it develops.

Over time, you could physically move TalkTalk customers in cabled areas over to VMO2 infrastructure. In effect, each transferred TalkTalk customer would be like a new install with a further cost on top of the £3bn cost of acquiring the company. TalkTalk could end up being the equivalent of BT's Plusnet value brand.

But given the above, I suspect the VMO2-TT talks may just be VMO2's way of making Vodafone pay more and getting some up to date market intelligence.

Interesting, my backup connection is Talk-Talk.

[RichardCoulter]

Originally Posted by 1andrew1

Interesting! Ironically, VM sold its non-cable customer base to TalkTalk seven years ago.

I wonder what the CMA will make of it?

Thanks for posting.

A big like when Virgin Media sold off their Cable business in the ROI to LG, then LG bought VM!

[Inactive Digital]

Originally Posted by 1andrew1

Over time, you could physically move TalkTalk customers in cabled areas over to VMO2 infrastructure. In effect, each transferred TalkTalk customer would be like a new install with a further cost on top of the £3bn cost of acquiring the company. TalkTalk could end up being the equivalent of BT's Plusnet value brand.

But given the above, I suspect the VMO2-TT talks may just be VMO2's way of making Vodafone pay more and getting some up to date market intelligence.

A few years ago, VM was reported to be looking at launching its own low-cost brand 'Ruby' to compete with TalkTalk, Plusnet etc but plans were dropped. This could well be their new way of entering that market segment.

On the other hand, with LG/VMO2 expanding their network in the coming years, the difference in footprint will reduce and TT customers could be gradually migrated over to the cable network. Who knows, interesting times ahead

[BenMcr]

Originally Posted by RichardCoulter

A big like when Virgin Media sold off their Cable business in the ROI to LG, then LG bought VM!

That was standalone ntl that did that, before the merger with Telewest and Virgin Mobile.

[Pierre]

Originally Posted by 1andrew1

Over time, you could physically move TalkTalk customers in cabled areas over to VMO2 infrastructure. In effect, each transferred TalkTalk customer would be like a new install with a further cost on top of the £3bn cost of acquiring the company. TalkTalk could end up being the equivalent of BT's Plusnet value brand.

But you would still have to maintain the legacy TT network on OpenReach. As customer numbers on that reduce it would soon become unviable.

---------- Post added at 22:42 ---------- Previous post was at 22:28 ----------

Originally Posted by Inactive Digital

A few years ago, VM was reported to be looking at launching its own low-cost brand 'Ruby' to compete with TalkTalk, Plusnet etc but plans were dropped. This could well be their new way of entering that market segment.

On the other hand, with LG/VMO2 expanding their network in the coming years, the difference in footprint will reduce and TT customers could be gradually migrated over to the cable network. Who knows, interesting times ahead

They looked a at launching a budget brand over their own network. Talk Talk is on the Open Reach network.

VM started a project to roll out VM over OpenReach’s FTTC network 10 yrs ago but when LG bought VM they stopped that to differentiate themselves from BT. So I cannot imagine they would want to buy an OpenReach FTTC reseller network.

[1andrew1]

Originally Posted by Pierre

But you would still have to maintain the legacy TT network on OpenReach. As customer numbers on that reduce it would soon become unviable.

They would have to give customers a deadline for cable installation or lose their service.

For the reasons I explained earlier, I think it's an unlikely acquisition. (Cost of transfer to VM network, high broadband market share).

[Pierre]

Originally Posted by 1andrew1

They would have to give customers a deadline for cable installation or lose their service.

Then why pay £3B for them, If you are going to discard them considering the VM footprint is around 50% of OR.

I know we’re not disagreeing. I can’t see the the reasoning behind the deal, but who knows!

[1andrew1]

Originally Posted by Pierre

Then why pay £3B for them, If you are going to discard them considering the VM footprint is around 50% of OR.

I know we’re not disagreeing. I can’t see the the reasoning behind the deal, but who knows!

The professed aim would be that VM could operate TalkTalk more cost effectively as it has its own network which it could transfer Talktalk customers to and there would be purchasing and back office savings too. Though TalkTalk's contracts with the altnets and Open Reach may have several years left to run. And there are the other significant issues with this which we have discussed.

Other benefits that would likely be pitched are the benefits for VMO2 to have a value brand during a recession and if they're stretching things, bundling in mobile contracts for TalkTalk customers too. The latter does not have a good history.

I still think their reasoning for tabling the offer is to get Vodafone to pay more for TalkTalk (or put them off buying it) and get some competitive intel on TalkTalk. If they can do this without buying TalkTalk then perfect.

But as you rightly say: Who knows?

[Richardr]

Originally Posted by 1andrew1

They would have to give customers a deadline for cable installation or lose their service.

For the reasons I explained earlier, I think it's an unlikely acquisition. (Cost of transfer to VM network, high broadband market share).

Almost by definition the majority of Talk Talk internet subscribers will not be in a Virgin Media area (as would be the case for any other telco). Any move of customers over to cable exclusively will lose most of them.

[Trekkie101]

It is worth remembering that VMO2 *are* a Openreach reseller though.

O2 are a large-ish player in the business broadband/ethernet/wifi game.

https://www.o2.co.uk/business/soluti...d-and-internet

https://www.o2.co.uk/business/soluti...ity/o2-gateway

A lot of the public wifi networks are O2 networks. There is just no consumer side to the FTTC/ADSL business - yet.

[Gavin-D]

Virgin Media O2 has started the process to sell at least 50% of its stake in its masts business.

The sale could raise as much as £750million and would be used to expand fibre broadband and mobile operations

https://www.ft.com/content/933abcba-...2-dbf058aa6e6c