In top news from UK stocks, Vodafone Group PLC (GB:VOD) has signed a new network-sharing deal with Virgin Media O2. The new deal significantly extends their existing agreement for more than 10 years. With this agreement, both companies are aiming to improve their network services while reducing costs. VOD stock was down 0.19% as of writing.
Based in the UK, Vodafone is a telecommunications company offering voice, messaging, and internet services. Virgin Media O2 was formed through an equal joint venture between Liberty Global and Telefónica.
More About Vodafone-Virgin Media O2 Deal
The Vodafone-Virgin Media O2 agreement is unrelated to the outcome of the Vodafone UK and Three UK merger. However, if the merger is approved, the companies have agreed that Virgin Media O2 will acquire spectrum from the newly formed company (MergeCo). This will lead to three expanded mobile network operators with more uniform spectrum holdings. Additionally, this deal will boost competition in the UK mobile market, enabling MergeCo and Virgin Media O2 to provide enhanced capacity, speeds, and coverage to their customers.
As part of the agreement, MergeCo has pledged to invest £11 billion in its network infrastructure over the next decade, pending merger approval. Meanwhile, Virgin Media O2 intends to continue its annual investment of £2 billion in networks and services.
Vodafone remains highly optimistic about this agreement and its pending merger and believes these deals will improve its mobile network in terms of quality and coverage, benefitting over 50 million customers in the long term.
Are Vodafone Shares a Buy?
According to TipRanks, VOD stock has a Moderate Buy consensus rating based on eight recommendations. The Vodafone share price target is 101.14p, which implies an upside of 46.6% on the current trading levels. The price target has a high forecast of 140p and a low forecast of 77p.
