In the wake of its failed netco network spin-off plans, UK converged challenger Virgin Media O2 (VMO2) is taking a new tack, betting big on customer experience to invigorate its fixed wholesale operations.
Omdia view
Summary
With plans to spin off a network infrastructure business now scrapped, UK converged challenger Virgin Media O2 (VMO2) is betting big on customer experience to invigorate its fixed wholesale operations. The new strategy, playing out in one of the world’s most crowded broadband markets, reflects an emerging global trend: the use of “experiential” factors to drive differentiation.
The problem with fixed wholesale
Mobile and fixed wholesale exhibit different growth trajectories. Mobile wholesale is entering a golden age as new virtualized services such as eSIMs trigger the creation of more mobile virtual network operators (MVNOs). Fixed wholesale, by contrast, is more problematic. The UK’s atomized broadband market—there are more than 100 fiber-based altnets of various sizes—is a tough place to be, even for a major player such as VMO2.
Fixed infrastructure is also expensive to expand and maintain, forcing the pursuit of alternative financing options. Until July 2025, VMO2 had expected to spin off its cable and fiber assets into a separate netco. The new structure would have a better focus on fiber commercialization, attract new investors, and have the scale to become a market consolidator. However, existing VMO2 investor Telefónica is no longer onboard as it rethinks group strategy.
This has forced VMO2 to pivot. It is merging two separate fixed wholesale units into one. Consumer-facing wholesale activities and business-focused activities are becoming a single organization. Wholesale customers will gain access to VMO2-connected locations and to those of nexfibre, another UK-wide fiber joint venture.
Retooling and simplification
The merged fixed wholesale operation will serve all wholesale customers with a unified sales team and a single digital interface. The logic is that these wholesale customers are using the same national network even if they are ultimately serving consumers and businesses.
Expected benefits include
- Improved response time to customer needs including quotes and orders
- Reduced service delivery windows enabled through an accelerated response
- Reduced operational costs to deliver services, which can support more competitive pricing or higher margins
Wholesale customers demand more
VMO2’s gambit of focusing on smoother digital customer experience is a smart move, given prevailing wholesale customer trends.
Experience, not just price and network reach, is rising in importance among wholesale buyers. Experiential factors—missed delivery times, poor communication, service quality—already account for three of the top five reasons to switch wholesale providers, according to Omdia’s Wholesale Customer Survey – 2025 (Figure 1).
Figure 1: Wholesalers need to treat their customers better
Source: Omdia
The reasons to double down on wholesale customer experience now outweigh the reasons not to. As Omdia has found, better experience leads to greater satisfaction, lower churn, and a higher probability of increasing revenue, whatever the customer type.
Nevertheless, VMO2 and other wholesalers need to do more. Next-generation wholesale is frictionless, customer first, and entirely transparent. Not least, as AI-enriched applications and network workloads grow, wholesale customer experience must be automated. This demands more investment in network as a service, APIs, and related digital tools to configure, price, activate, monitor, and adapt services.
Appendix
Further reading
Wholesale Customer Survey – 2025 (June 2025)
Wholesalers’ Enhanced Portals and APIs Simplify Transactions and Improve Partner Experiences (October 2023)
Author
Cindy Whelan, Practice Leader, Telco B2B Strategies
