Virgin Media O2: Inflexible IT Contracts Causing Customer Headaches

Lengthy and inflexible IT contracts are preventing businesses from bouncing back from the pandemic. That’s according to new UK channel research from Virgin Media O2 Business.

Almost half (44%) of senior IT managers say they are locked into restrictive contracts with partners. More than a third (36%) say renegotiating fixed-term contracts is a barrier to operating more flexibly. The respondents claim these contracts are stopping them from making “bold decisions” over the next 18-24 months.

More than nine in 10 senior IT managers believe investment in new digital services will help their business bounce back from COVID-19. However, almost three in five (57%) do not believe their business is agile enough. They say they are unable to flex tools and infrastructure or make swift decisions in response to changing conditions.

Virgin Media O2’s Mike Hallam

Mike Hallam, director of fixed wholesale at Virgin Media O2 Business, said businesses “are crying out” for more flexibility, certainty and value. He said they want to “unlock the power of digital technology and bounce back stronger.”

Almost half (47%) of respondents say that committing to long-term contracts involves significant upfront fees which their business can’t afford. Meanwhile, 42% see signing multiyear contracts as risky in the current climate.

More than two in five (43%) senior IT managers would like more support from their connectivity provider. They reportedly want the flexibility to end contracts with partners penalty-free. They cite this as one of the most important things they could do to support future growth over the next 18 months.

New Contracting Model

The research was released to coincide with Virgin Media O2 Business’ launch of ‘UltimateFlex.” The firm says this is a new contracting model for wholesale services. It abolishes upfront fees and offers customers “anytime cancellation” as standard for managed Ethernet, internet access and high-capacity services.

“After a bruising year, we’re giving partners a leg up,” said Hallam.

Virgin Media O2 launched in June. A joint venture between Liberty Global and Telefónica, it offers connectivity services, applications and digital solutions to UK organizations.

While there is no change to existing services today, the company says plans are underway for a new offering later this year. It plans to offer “seamless broadband, entertainment and mobile services all in one place, under one roof.”