Virgin Media & O2 pledge 4,000 new jobs… if their merger is approved

• UK cable and mobile operators already engaged, require regulatory approval for marriage
• They aim to launch 5G services in 100 UK towns and cities by end of 2021
• They are pledging to create 4,000 new roles and 1,000 apprenticeships if given the green light
• But will these be net headcount gains? Automation is shrinking telco workforces

The merger of UK operators Virgin Media and O2 (Telefónica UK) will result in the creation of 4,000 new jobs and 1,000 apprenticeships, primarily for “young people,” if the deal is given the green light by regulators, the operators’ parent companies, Liberty Global and Telefónica, have stated. 

The merger, valued at £31 billion, was first announced in May this year, when the two companies stated their intention to create a “national connectivity champion” with more than 35 million mobile connections and 5.5 million broadband and TV customers combined. The two parties said the deal should close by mid-2021. 

At the time they said they would invest £10 billion during the next five years: Part of that investment will go on the continued rollout of what is currently O2 UK’s 5G network, with the aim of providing 5G coverage in more than 100 towns and cities across the UK by the end of next year; another capex focus will be Virgin Media’s high-speed cable broadband network rollout, which the companies say will reach an additional 1 million homes within 12 months of the deal closing. Currently, Virgin Media is upgrading its cable access network and says all 15 million homes passed will have access to gigabit broadband by the end of 2021.

In addition, Liberty Global and Telefónica say they will accelerate that gigabit broadband rollout and reach a further 7 million homes and businesses “in the coming years.”

And in a statement issued today, the duo also said they would offer all state schools within its footprint a “free upgrade” to a gigabit broadband service.

All of which sounds great for the UK, which needs all the news it can get right now about new jobs, work opportunities for young people and capital investments.

Liberty Global and Telefónica know this – they are making it hard for regulators to halt the planned merger with any competition concerns they might have: After all, who wants to be the person or department that said “no” to new jobs and free broadband upgrades for schools? The announcement by Liberty Global and Telefónica is clever if somewhat cynical. 

And there have bene many instances where companies have said they will create new jobs, but not promised to retain all existing jobs: 4,000 new jobs doesn’t always equate to an extra 4,000 warm bodies on the company payroll, especially in these days when increasing automation is shrinking the network operator workforce year by year. 

What regulators might now want to do is hold the companies to the spirit of their word as a condition attached to any merger approval, forcing the two companies to increase their combined headcount by 4,000 posts: That would represent an increase of about 22% on top of the current combined 18,700 staff (12,000 at Virgin Media, 6,700 at O2 UK). 

Now, that would be a great result for the UK and something for which it might be worth approving the proposed merger.  

- Ray Le Maistre, Editorial Director, TelecomTV