The deal agreed during the merger somewhat reduces imbalances between the three UK operators while improving Virgin Media O2’s competitive and network positions
Virgin Media O2 is set to acquire 78.8MHz of spectrum across four bands, putting it to use from this year
On 30 June 2025, Virgin Media O2 announced the details of its spectrum transfer agreement with Vodafone in the UK. The deal, which follows the completion of the merger between Vodafone and Three (that has now created VodafoneThree), and is subject to Ofcom approval, will see Virgin Media O2 acquire 78.8MHz of spectrum from its rival for £343m. Specifically, it will acquire:
20MHz of 1400MHz Supplemental Downlink;
18.8MHz of 2100MHz Frequency Division Duplex (FDD);
20MHz of 2.6GHz Time Division Duplex (TDD); and
20MHz of 3.4GHz TDD.
The spectrum will be partially funded by the sale in October 2024 of a minority stake in Cornerstone (the long-running O2/Vodafone mobile network sharing agreement), with spectrum payments extending beyond 2025 and deployment occurring over the medium term, starting this year.
The transaction provides a boost to Virgin Media O2’s mid-band holding, while reducing spectral asymmetries relative to its competitors
According to Virgin Media O2, the transaction will materially enhance its network position, enabling it to provide increased capacity, improved speeds and greater coverage for customers throughout the country. It also considers that the transfer will enhance competition by ensuring that the UK has three scaled mobile network operators with a greater balance in terms of spectrum holdings. Virgin Media O2’s share of total spectrum will rise to nearly 30%, with the operator having 75MHz below 1GHz, 100MHz in the 3.4-3.8GHz range and 151MHz between 1.4-2.6GHz – a significant increase on its previous mid-band holding. Meanwhile, VodafoneThree will own 39% of total spectrum below 6GHz and BT/EE would hold 32%.
The CMA did not view previous spectrum imbalances as problematic, but considered they could have an impact on network sharing
Virgin Media O2 has underlined that the spectrum transfer is part of a wider deal struck with Vodafone in July 2024 to extend and enhance the two operators’ existing Cornerstone agreement for more than a decade, with the aim of improving coverage and services across the UK. The updated agreement is expected to not only benefit consumers and businesses, but also MVNOs, which will have access to a higher capacity network across a broader grid of sites. In its review of the Three/Vodafone merger, the Competition and Markets Authority (CMA) did not explicitly highlight spectrum as a major competition concern; however, it recognised the scope for different holdings to influence an operator’s reliance on, or incentives to cooperate in, a network sharing agreement and even the potential for them to frustrate their network sharing partner as a result. In its Phase 2 provisional findings, the CMA described the spectrum trade as a “structural divestment’, stating that it would increase spectral symmetry between Virgin Media O2 and the merged entity while enhancing the former’s ability to compete.
