Virgin Mobile UK was a mobile phone service provider. The company was launched by Virgin Group and One2One in 1999 as the world's first mobile virtual network operator (MVNO), initially using the One2One network. Virgin Mobile offered contract mobile packages, as well as mobile broadband services. It sold its services directly, as well as through price comparison sites.
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. Virgin Media was purchased by Liberty Global in 2013, and merged with O2 in 2021. The company began transferring customers to O2 services from March 2023, and it ceased trading on 31 August 2023 upon completion of all customer transfers.[1] Existing Virgin Mobile UK customers are still legally contracted to Virgin Mobile UK, but with O2 providing the services until the end of the contract.[2]
History
Virgin Mobile was launched in November 1999 as a private joint venture between One2One (later T-Mobile UK) and the Virgin Group.[3] 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.[4]
The company reported its first annual profit in 2003, following successful Christmas sales.[5]
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.[6] 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.[7]
Branson had considered making Virgin Mobile public in 2002.[8] Eventually, dealing in shares of Virgin Mobile began on 21 July 2004,[9] with 37% of the shares made available for sale as an initial public offering and the rest held by the Virgin Group.[3] 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.[10]
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.[11]
Merger with O2 and closure
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 two companies. Following approval by the Competition and Markets Authority, the merger to form Virgin Media O2 was completed on 1 June 2021.[12][13] Virgin Media said that Virgin Mobile customers would see no immediate changes.[14]
In January 2023, it was confirmed by Virgin Media O2 that Virgin Mobile would close, with all customers moving from Virgin Mobile to O2; migration started in March 2023 and was completed in August 2023.[15]
On 31 August 2023, sales of new Virgin Mobile SIM only and device plans were stopped and the network ceased operations.
Services
Virgin Mobile sells contract airtime, mobile phones and mobile broadband, marketed through Virgin Media and its high street stores.[16]
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 as EE consolidated the coverage of the two formerly separate networks.[17] As part of the merger, Virgin Media continued the agreement with EE to use its network, and phones could roam between a formerly T-Mobile UK mast and a former Orange mast from early October 2011.[18]
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.[19]
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]
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.[20] From January 2021 new customers were connected to the Vodafone network, and it was reported that existing customers would be moved from EE to Vodafone by early 2022.[21] However, following the mid-2021 merger, Virgin Media O2 stated that notice to cancel the MVNO agreement had been given, and that the company intended to bring all consumer mobile services onto the O2 network.[22]
In January 2021, Virgin Media launched 5G services using the Vodafone network.[23][24] Later that year, the company announced that their pay-as-you-go service would be discontinued between October 2021 and January 2022.[25] The transfer of all Virgin Media customers from the Vodafone network to the O2 network was completed in 2022.[15]
£563 million (2006)
