With the UK competition watchdog giving its initial approval to the £31bn merger of O2 and Virgin Media, the two brands’ marketing agencies and suppliers will be gearing up for one of the biggest pitches of recent years as the combined group looks to slash costs.
The deal brings together O2’s 34 million mobile network customers with Virgin’s 5.3 million broadband, pay-TV and mobile users.
Virgin Media’s CRM account has been handled by Rapp for over a decade, while Adam & Eve DDB scooped the ad business from BBH in 2019 and OMD UK retained the media brief. Meanwhile Paragon is understood to run the marketing communications and print business.
The O2 CRM account is currently been held by M&C Saatchi, although the company did postpone a review last year.
VCCP has run O2’s advertising since 2002, and its CRM agency VCCP Me has worked on certain elements of the business in the past. Havas handles media, alongside an in-house division called Team O2 and Tag Williams Lea runs the print.
All incumbent businesses – and others who will be considering gatecrashing the party – have had months to get in shape; the proposed merger was first announced in May last year.
The Competition & Markets Authority launched an investigation into the merger last December, citing concerns that it might mean higher prices or poorer quality for the wholesale services supplied by the companies to other network operators such as Sky and Tesco Mobile.
But in its provisional decision on the deal, the CMA said the presence of rivals in the market to supply “leased line” and mobile network services to other companies meant the merged company would need to stay competitive.
CMA chairman Martin Coleman said: “Given the impact this deal could have in the UK, we needed to scrutinise this merger closely. A thorough analysis of the evidence… has shown that the deal is unlikely to lead to higher prices or a reduced quality of mobile services – meaning customers should continue to benefit from strong competition.”
A joint statement from Virgin Media owner Liberty Global and Telefonica, which owns O2, said: “We continue to work constructively with the CMA to achieve a positive outcome and continue to expect closing around the middle of this year.”
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