In a bold move to reshape the UK’s broadband landscape, VMO2, backed by shareholders Liberty Global and Telefónica, has announced the launch of a new fixed network company, ambitiously positioned as a direct competitor to BT’s Openreach. Dubbed NetCo for now, this venture aims to accelerate the adoption of full fibre broadband, offering a fresh financing framework and a potential platform for the consolidation of alternative network providers (altnets). This strategic initiative is expected to significantly enhance wholesale broadband options for service providers on a large scale.
NetCo, set to operate as a fully integrated subsidiary under VMO2, will consolidate the operator’s existing cable and fibre network infrastructure, which currently extends across 16.2 million premises nationwide. A key aspect of this venture is a wholesale agreement ensuring the connection of Virgin Media O2’s entire fixed-line customer base, although VMO2’s mobile operations will remain separate. Meanwhile, nexfibre—a joint fibre venture by Liberty Global, Telefónica, and Infravia—will maintain its focus on expanding fibre networks in undeveloped areas.
Upon completion of its ambitious fibre expansion plans, the combined reach of NetCo and nexfibre is expected to encompass up to 23 million homes, covering approximately 75% of the UK. This expansion is seen as a pivotal step towards establishing a competitive fibre network market against Openreach, with VMO2 and nexfibre currently boasting a fibre network footprint exceeding 4 million premises.
Lutz Schüler, CEO of Virgin Media O2, highlighted the move as a strategic evolution in the company’s fibre approach, aiming to position VMO2 as Openreach’s primary challenger. Schüler emphasized the initiative’s potential to foster altnet consolidation and create substantial wholesale opportunities, alongside enhancing financing flexibility.
Industry experts, including Kester Mann of CCS Insight, have praised the initiative, recognizing its potential to invigorate competition and benefit consumers by offering more choices and fostering innovation in the UK’s broadband services. The industry awaits further details on the operational aspects and regulatory approvals of this promising venture.
