Vodafone UK and Virgin Media O2 (VMO2) have agreed to extend and enhance their existing mobile network sharing agreement for over a decade.

As a result, the partnership will ensure high-quality mobile coverage nationwide and an improved service for customers.

Many aspects of the agreement build on the existing partnership between the two telecom giants and are independent of the outcome of the Vodafone UK and Three UK merger.

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However, if the merger is completed, VMO2 will acquire spectrum from the newly formed MergeCo, creating three scaled MNOs with better spectrum alignment.

With MergeCo committed to investing £11 billion in its network over the next decade, pending CMA approval, and VMO2’s £2 billion annual investment in its networks and services, the agreement will enhance choice and competition, the company stated.

The agreement includes plans for VMO2 to purchase spectrum at market value from MergeCo, increasing its current holding.

Vodafone CEO of European Markets, Ahmed Essam, said: “With this agreement and our merger with Three, we will transform the mobile experience for over 50 million customers in the UK for the long-term, providing significant network improvements including more choice, better quality and greater coverage across the country.

“These benefits extend to both retail and wholesale MVNO customers. The proposed merger, together with this agreement, will boost competition by establishing a strong third player in the UK mobile market and will improve the balance of spectrum holdings, levelling the playing field between the UK’s mobile operators.”

VMO2, CEO Lutz Schüler, added: “This new agreement with Vodafone ensures that quality mobile network choice, performance, coverage and competition is enhanced to the benefit of millions of consumers, businesses and our mobile operator partners across the country.

“We are extending and bolstering elements of our existing network sharing arrangement, while also ensuring there is a robust, balanced and functional structure in place for the long-term should Vodafone and Three’s proposed merger gain consent.

“We believe that this new agreement addresses the issues we have voiced and the CMA outlined in its initial decision, and we will now continue our engagement with the regulator in this spirit.”