British telecoms firms Vodafone UK and Virgin Media O2 have agreed to extend their network-sharing agreement for more than a decade, Vodafone Group announced on Wednesday.
The deal is subject to the UK's competition regulator approving a merger between Vodafone UK and Three UK.
Vodafone noted that many elements of the agreement expand on the existing arrangement between Vodafone UK and Virgin Media O2 and are independent of the Vodafone UK and Three UK merger outcome. However, subject to completion of the merger, the operators have agreed that Virgin Media O2 will acquire spectrum from the newly created MergeCo.
The agreement includes plans for Virgin Media O2 to purchase spectrum at market value from MergeCo, increasing their current holding.
It is expected that the agreement and formation of MergeCo will significantly enhance competition in the retail and wholesale mobile markets.
Ahmed Essam, head of European markets at Vodafone, said: "With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK for the long-term, providing significant network improvements including more choice, better quality and greater coverage across the country. These benefits extend to both retail and wholesale MVNO customers.
"The proposed merger, together with this agreement, will boost competition by establishing a strong third player in the UK mobile market and will improve the balance of spectrum holdings, levelling the playing field between the UK's mobile operators."
