Data challenges laying ahead for O2 and Virgin Media in merger bringing together almost 40 million customers
First announced in May 2020, a £31bn merger between O2 and Virgin Media was provisionally cleared by the Competition and Markets Authority last week. The deal, which will bring together O2’s 34 million mobile network customers and Virgin’s 5.3 million broadband, TV and mobile users, was under review due to concerns it may harm competition in the UK market. As with most M&As, there will be challenges in combining the two businesses – especially their data.
The new business will need to unify all existing data together in a unified format, to ensure all departments are working from the same page, and customers are given a consistent experience. According to Harry Dougall, CFO and Founding Partner at data solutions provider Sagacity, however, when it comes to a merger of this scale, this process can take years, especially if customer information is spread across siloed departments.
Dougall says the two businesses will need to check for accuracy with all existing records that need to be merged, for example, ensuring someone who was a customer of both organisations isn’t counted twice. Existing data should also be used to help the company decide which media packages to offer each type of customer, identify opportunities to cross-sell services, and determine the most valuable customers, so they can focus on retaining them.
“This is the latest in a long line of massive telco M&As, with plenty more rumoured to be in the pipeline. One of the biggest challenges with M&As is that it’s not just merging two businesses – it’s all their data as well. If data is spread across siloes and legacy systems and contact channels, the process can take years, leaving two separate organisations running side-by-side in the meantime. This may leave customers wondering where the promised benefits of the merger have gone, and risk them growing unhappy and potentially churning – especially if a rival senses problems are afoot,” said Harry Dougall, CFO and Founding Partner at data solutions provider Sagacity.
“To unify their data in a more timely manner, organisations need to turn to the power of analytics to pull everything together and create a single customer view. Then they can merge records of people who are customers of both companies, identify cross-sell opportunities and start creating new tariffs and bundles. Having a single customer view also makes it possible to pinpoint specific customers they must focus on retaining, based on factors such as total spend, cost to service and the length of their contract. With the cost of acquiring new customers dramatically increasing in recent years, retaining your valuable ones after an M&A has arguably never been more important.”