The owners of Virgin Media O2 have joined hands with French investment firm InfraVia Capital Partners to form a fiber broadband joint venture and will spend 4.5 billion pounds ($5.5 billion), increasing direct competition with BT.
Virgin’s owners Liberty Global and Spain’s Telefonica, plus InfraVia, said the broadband network would cover around 7 million premises across the UK, in areas not already covered by the existing Virgin Media network, and offer wholesale access to other broadband providers.
BT has long provided the main wholesale network in Britain, giving access to the likes of TalkTalk and Sky. BT is investing billions of pounds into its network, extending its fiber offering to 25 million premises by end-2026.
Virgin Media O2 CEO Lutz Schuler said the JV network combined with an upgraded Virgin Media network would offer gold-standard fiber connections to 23 million premises by 2028, Reuters news report said.
Britain is aiming for nationwide full-fiber broadband coverage by 2033 in an attempt to boost economic growth. It hopes 15 million premises will have full-fiber broadband by 2025.
The network would be available to 5 million homes that are not served by the current Virgin Media O2 network by 2026, with an opportunity to expand to an additional 2 million homes.
The deal will include 3.3 billion pounds of fully underwritten financing commitments and up to 1.4 billion pounds in equity commitments.
The company is in discussions with broadband providers such as Sky, Vodafone and TalkTalk about wholesale access, which would be offered across the new network and Virgin Media’s existing footprint.