Ericsson AB secured the majority share of Virgin Media O2’s multi-year 5G network upgrade, a five-year deal valued at several hundred million Euros that makes the Swedish firm the primary radio access network partner for the UK operator. The agreement is the centerpiece of VMO2’s Mobile Transformation Plan, which also includes a significant, parallel RAN deal with rival Nokia Oyj.
“As we continue to evolve and enhance our award-winning mobile network, both Ericsson and Nokia remain key strategic partners in helping us deliver reliable connectivity to our customers,” Jeanie York, Chief Technology Officer at Virgin Media O2, said in separate statements. “This new agreement allows us to accelerate our 5G rollout, improve performance, and ensure we meet growing demand for high-quality mobile services.”
Under the terms of the deals, Ericsson will supply the majority of the radio equipment, focusing on its 5G Standalone programmable network capabilities and AI-powered analytics. Nokia will provide its latest-generation AirScale RAN portfolio, including modular basebands and Massive MIMO radios. Together, the suppliers will replace the UK operator’s existing RAN infrastructure, which is a joint venture between Liberty Global and Telefónica SA.
The dual-vendor award concludes a competitive process for one of Europe’s largest 5G contracts. For Virgin Media O2, the strategy diversifies its supply chain and provides leverage in a market dominated by a few large equipment providers. For Ericsson, securing the majority position is a significant victory over its Nordic rival, solidifying its foothold in the UK market as operators accelerate their move to 5G Standalone networks.
Dual-Vendor Strategy Mitigates Risk
By splitting the contract, Virgin Media O2 is ensuring supply chain resilience and fostering competition between its two primary vendors. While Ericsson holds the larger share, Nokia’s continued presence as a primary partner maintains a multi-vendor environment, a strategy encouraged by the UK government following its decision to limit the role of high-risk vendors in national telecom infrastructure. The combined investment from VMO2’s transformation plan is expected to total more than €500 million over the next five years.
Path to 5G-Advanced and AI-RAN
Both Ericsson and Nokia will deploy equipment that is “future-proofed” for 5G-Advanced capabilities and supports AI-native architectures. The agreements include provisions for joint innovation programs to explore advanced RAN intelligence and automation. This aligns with a broader industry shift towards AI-RAN, a concept being championed by technology firms like Nvidia, which sees future networks operating as a distributed compute grid. While the VMO2 deals are based on current 5G technology, they lay the groundwork for a software-driven, AI-integrated 6G future.
This article is for informational purposes only and does not constitute investment advice.
