James Marshall is the head of treasury at Virgin Media O2, a joint venture between the two telecoms giants. When Liberty Global’s Virgin Media and Telefonica’s O2 came together in 2021, Marshall and his team were faced with bringing together the treasury operations of two separate businesses while still dealing with the fallout from COVID-19 – hybrid working, regulatory constraints and a fast-moving business environment threw up many challenges, but also many opportunities.
Marshall took time out from his schedule to update ACT members at the recent annual conference on the JV’s progress, and how he still turns to the basic tenets of security, liquidity and yield to guide his strategy and operations.
“First, can I say how impressed, and delighted, I was at the number of treasurers who came to hear about, and ask questions of, our joint venture at Virgin Media O2. Given that it was Day Two, and after lunch, I was pleasantly surprised. I was also pleased with the air of optimism I felt in the room and across both days of the conference. Yes, we are all facing a tough period in the business environment, but there was a real sense that treasurers are rolling up their sleeves and delivering value for their organisations.
“The combination of Virgin Media and O2 is already showing positive results: for Q1 2023 we now have 44.9m mobile connections, up 2.2m on Q1 2022, and 16.1m mobile contracts, up 118,100 on Q1 2022. Fixed lines and broadband connections are also growing.
“Although we operate within a complex business structure and regulatory environment, where we have joint ventures within our own JV, I think it is still very important to remember the basics of security, liquidity and yield. Regulatory constraints meant that there was very limited contact between the two sides until the close of the deal, but from day one, I reminded the combined team about the importance of SLY.
“For security, we need to know our customers and understand our exposure levels, treasury policies and ratings. Under liquidity, we must remember cash is king and the importance of the cashflow forecast. With yield, everything has a value.
“Support from the two shareholders has been very valuable. We have been able to leverage Telefonica and Liberty Global’s speciality finance operations and central treasury support teams to access vendor finance, capital markets, derivative financing, securitisation products and cash management. As such, we have been able to buy in internal services when we needed them. Plus, we have a detailed treasury policy from the shareholders – these are the rules that we follow, though we feel able to raise operational issues with the shareholders when necessary.
“As for the team, we remain focused on talent retention. During the pandemic, the team worked on the merger from home, so we needed to ensure that we maintained people’s enthusiasm for the joint venture. Both sides of the joint venture have a young culture, though through a well-established graduate scheme, much of the talent coming up through the organisation has been with us for some time, and they recognise that the merger has been a change for good.”
James Marshall was speaking with Philip Smith, editor of The Treasurer
Next year's Annual Conference will be held in Liverpool on 21-22 May 2024.