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Virgin Mobile (UK)

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Virgin Mobile Telecoms Ltd.
Company typeSubsidiary
IndustryMobile phones
FoundedNovember 1999; 25 years ago (1999-11)
Headquarters
Before acquisition: Trowbridge, Wiltshire
,
United Kingdom
ProductsMobile telephony
RevenueIncrease £563 million (2006)
Increase £66 million (2006)
OwnerLiberty Global
Number of employees
1,700
ParentVirgin Media
Websitewww.virginmedia.com/mobile/

Virgin Mobile, also known as Mobile from Virgin Media, is a mobile phone service provider operating in the United Kingdom, and a subsidiary of Virgin Media. The company was launched by Virgin Group in 1999 as the world's first mobile virtual network operator (MVNO). As a virtual operator, Virgin Mobile does not maintain its own network and currently uses the EE network.

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 and received a new logo in line with its parent. Virgin Media was subsequently purchased by Liberty Global in 2013.

Virgin Mobile offer contract mobile packages, as well as mobile broadband services. It sells its services directly, as well as through price comparison sites.

History

Virgin Mobile was launched in November 1999 as a private joint venture between One2One (later T-Mobile UK) and the Virgin Group.[1] 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.[2]

The company reported its first annual profit in 2003, following successful Christmas sales.[3]

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.[4] 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.[5]

Branson had considered making Virgin Mobile public in 2002.[6] Eventually, dealing in shares of Virgin Mobile began on 21 July 2004,[7] with 37% of the shares made available for sale as an initial public offering and the rest held by the Virgin Group.[8] At the time, the company had 4.1 million customers and employed 1,400 staff in the UK; the listing valued the company at £500m.[9]

Acquisition by Telewest, 2006

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 ($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 £961m, or 372p per share.

On 4 April 2006, NTL:Telewest announced a £962.4m 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 389p; or 0.18596 of an NTL:Telewest share, and 67p 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]

Services

Virgin Mobile sells contract airtime as well as mobile phones. The company also provides mobile broadband services through the EE 4G network, using a Huawei E160 USB modem dongle painted black with a silver Virgin Mobile logo.

Mobile phone and broadband services are marketed through Virgin Media and its high street stores.[11]

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 where T-Mobile had begun decommissioning masts where Orange already had coverage.[12] However, as part of the merger, Virgin Media had an agreement with EE to use its masts, and phones could change between a T-Mobile UK mast and an EE mast from early October 2011. A phone connected to a T-Mobile mast displayed "Virgin", whereas a phone connected to EE showed "virgin".[13]

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.[14]

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]

In January 2021, Virgin Media launched 5G services using the Vodafone network. Initially only new customers taking a SIM-only or 5G handset contract would be provisioned on the Vodafone network; existing customers and those purchasing a 4G handset contract were to remain on EE's network until later in 2021.[15][16]

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.[17]

Future

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 companies. The talks are ongoing and, if concluded, any such merger would be subject to regulatory approval.[18] In April 2021, the Competition and Markets Authority provisionally approved the O2-Virgin merger.[19]

References

  1. ^ "Virgin Mobile reveals share range". BBC News. 7 July 2004. Retrieved 15 February 2010.
  2. ^ "Mobile users flock to Virgin". BBC News. 3 January 2002. Retrieved 15 February 2010.
  3. ^ "Virgin Mobile reports strong sales". BBC News. 23 January 2003. Retrieved 15 February 2010.
  4. ^ "Virgin Mobile on road to market". BBC News. 29 January 2004. Retrieved 15 February 2010.
  5. ^ "'Tug-of-love' over Virgin Mobile". BBC News. 10 March 2003. Retrieved 22 August 2007.
  6. ^ "Branson may take Virgin Mobile public". BBC News. 8 March 2002. Retrieved 15 February 2010.
  7. ^ "Virgin Mobile plans July float". BBC News. 30 June 2004. Retrieved 22 August 2007.
  8. ^ "Virgin Mobile reveals share range". BBC News. 7 July 2004. Retrieved 15 February 2010.
  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. ^ Virgin Media Mobile - Pay as you go and pay monthly phones Archived February 9, 2010, at the Wayback Machine Virgin Media
  12. ^ T-Mobile merger creates Virgin mobile blackspots PC Pro
  13. ^ Clover, Julian (10 October 2011). "Virgin connects mobile network with Orange". Broadband TV News. Retrieved 14 April 2021.{{cite web}}: CS1 maint: url-status (link)
  14. ^ "Virgin becomes last major UK 4G network". 7 November 2016 – via www.bbc.co.uk.
  15. ^ "Virgin Media launches 5G services in the UK". Virgin Media. Retrieved 2 February 2021.
  16. ^ Jackson, Mark (25 January 2021). "Virgin Media's 5G Mobile Goes Live via Vodafone UK UPDATED". ISPreview UK. Retrieved 2 February 2021.
  17. ^ "Virgin Media UK Says Goodbye to BT, Signs Vodafone for Mobile". ISPreview UK. 6 November 2019. Retrieved 7 November 2019.
  18. ^ "O2 and Virgin Media in talks to merge". BBC News. 4 May 2020. Retrieved 14 May 2020.
  19. ^ "CMA provisionally clears merger of Virgin and O2". Gov.uk. 14 April 2021. Retrieved 14 April 2021.
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