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Unclestein
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Virgin O2 merger.

This could get interesting.

It will either be very good or very rubbish, depending on which side of the company takes over the customer service.

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Andrew-G
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Re: Virgin O2 merger.

Well, some aspects can be seen in advance (mostly through common sense, although I've planned mergers of this scale in my professional life).

The bringing together of the VM Mobile business and O2 isn't going to happen quickly, because the systems are different, and VMM customers are tied to Vodafone's network until VM agree a buyout price for the Vodafone MVNO agreement.  It could be done inside a year, but could equally be left to "age out" over five years - much will depend on any exit clauses, minimum volume commitments, and early termination penalties.  So VMM customers will see the same dismal service, and that will probably get worse as VMM is run-down.  And the business can't avoid that running down, because to make the merger finances work, they need to cut around 8-10,000 jobs from the combined operation.

O2 will be the dominant party on the mobile side, so (other than some merger hiccups that can be significant) O2 customers should mostly see better customer service continue, and chances are that will continue for a long while, although it is important to note that this isn't a merger of equals, it is effectively a takeover by VM being dressed up as a merger.  So much longer term (circa 5 years?) VM's cavalier attitude to customer service will prevail unless greater competition in the fixed broadband market FORCES the company to change its ways, kicking and screaming. 

How will this impact the existing VM (non mobile) business?  Not much at all.   Mostly the same managers, the same "sales first ,service last" (or not at all) mentality.  The same cludgey broken systems, the same faulty processes, the same mindset that intentionally stops staff taking ownership and fixing things.  With that need to reduce costs, there will be pressure to close any smaller locations, consolidate any outsource service provision, so pressure remains on cost to serve, and customer service will still be seen as an unwelcome expense. So on customer service the best hope is that it remains as is, the balance of probability is that it would get a bit worse.

At some point within the first five years the O2 and VM IT will need to be merged.  That sometimes goes OK, and the headlines are rarely about success stories, but IT migrations on big Oracle or SAP platforms are rather more famous for going expensively wrong, and taking customer service down in the process.  I've seen that repeatedly in the energy sector.

And behind that there's the whole competitive background in the broader communications market.  Will the Openreach FTTP roll out start to make inroads to VM's (currently) differentiated offer of high speed internet and content?  Could certainly make things far better for Sky, BT, and any big budget new entrants who might want a piece of the action.  Expect UK content resellers (VM, Sky, BT)  to become even more focused on unique content and channels and probably a higher cost to customers to pay for that exclusivity.  Will a "quad play" of VM + O2 make any difference to customer churn?  Will the sleeping dwarves of Ofcom follow the lead of the financial regulators, and implement changes like requiring existing customers to access new customer pricing?  With the growth of FTTP and other new fibre networks harm VM's pricing and commercial model, and what might that mean for future investment in VM's network?  Will VM's hope to use network backhaul for 5G mobile reveal yet more utilisation problems.  What if like for like FTTP wholesale costs are lower than VM's long term average costs?    

So some things that can be seen, many imponderables.  On final thought, and that is profitability.  VM has struggled to make decent profits for many years, despite high network utilisation, and the poor net additional performance of Project Lightning, the last intended  game changer.  This unprofitability is one reason why customer service for VM has been so poor.  If the merged business did start making money, then there is the potential for that to change, but that would not happen quickly - I'm guessing 2024 before we'd see any front line impact of better customer service, but more likely post 2026.  Merging two large companies takes five years (and even then has remaining rough edges), but changing the entire culture, well that's a seven year effort, with absolute commitment and leadership from the very top.

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Re: Virgin O2 merger.

I have to say that I’ve received two fantastic days of customer service from both VM and Virgin Mobile. Coincidence maybe, but considering I normally dread having to call Virgin, the last twos days have started to improve my opinion of their customer service.

The two advisers I’ve dealt with went out of their way to solve two separate issues for me. Hopefully a sign of things to come…

https://community.virginmedia.com/t5/Managing-Your-Account-Cable/Superb-Customer-Service/td-p/473921...

Unclestein
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Re: Virgin O2 merger.

Thanks for your insight Andrew-G. It all seems to make sense now.

If what you are saying is right then this has the hallmarks of top-heavy management which the board has put in place to delegate and 'fix' things, at the expense of the more expendable front-line staff. In reality it's a temporary sticking plaster to cover up massive failings in communication and morale among staff. Meanwhile the few front end customer support staff are left to deal with an infinite backlog of complaints. No-wonder they don't have an email address!

I've had dealings in the past with other multi-national organisations, including three of the 'Big 6' energy suppliers, British Gas, and Paypal, among others. All would appear to have the same stubborn mindset, and who will only back-down at the point where the ombudsman have acknowledged the complaint. In all these cases there has eventually been a supervisor tasked with the priority complaints ie: those for which the Ombudsman could impose penalties, or  those which are attracting negative media attention (such was in my case a few years ago).

A good customer service base makes a world of difference, but I've noticed it all seems to go pear-shaped whenever the 'central guy in charge' is replaced by an executive board......

It makes you wonder if the stakeholders know or even care what goes on with their investment!

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