Virgin Media O2 Starts Fixed Network Company, Challenging BT’s Openreach

Virgin Media O2, in collaboration with its shareholders Liberty Global and Telefonica, has unveiled plans to establish a dedicated national fixed network company (NetCo). This initiative aims to accelerate full-fibre uptake and deployment.
Virgin Media and O2
It seeks to position itself as the largest challenger to BT’s Openreach, offering a compelling wholesale alternative to other providers.

The newly formed entity, to be fully integrated into Virgin Media O2’s operations, will encompass the company’s cable and fibre network assets, spanning 16.2 million premises across the UK. Over time, all of these premises will undergo upgrades to full fibre, aligning with Virgin Media O2’s network strategy.

NetCo’s primary focus will be to advance Virgin Media O2’s fibre upgrade program, which involves transitioning the existing cable network to full-fibre infrastructure. The company will also explore opportunities for financing flexibility and participation in altnet consolidation while actively pursuing wholesale partnerships as a scalable network alternative.

While Virgin Media O2’s consumer and B2B divisions, alongside its mobile network, will continue to cater to millions of customers with evolving connectivity services, NetCo will serve as the backbone, connecting the entire fixed customer base through a wholesale agreement. This arrangement ensures immediate revenue generation and robust cash flow upon commencement of operations.

Importantly, NetCo’s scope does not include Virgin Media O2’s mobile assets, which will remain separate. Furthermore, Nexfibre, the independent fibre joint venture between Liberty Global, Telefonica, and InfraVia, will continue its operations independently, focusing on expanding fibre networks into untapped greenfield areas.

Upon completion of planned fibre builds, the combined networks of NetCo and Nexfibre will cover up to 23 million homes, constituting significant fibre network competition across approximately 75 percent of the UK. Currently, Virgin Media O2 and Nexfibre collectively serve over 4 million premises with full fibre.

The development of NetCo is underway through collaborative efforts between Virgin Media O2 and its shareholders, with operational timelines and further details expected to be announced in due course, subject to regulatory approvals. Meanwhile, fibre upgrade activities at Virgin Media O2 remain unaffected.

Lutz Schuler, CEO of Virgin Media O2, emphasized the logical evolution of the company’s fibre strategy. He highlighted NetCo’s role in solidifying Virgin Media O2’s position as a leading challenger to Openreach, while also providing a platform for future growth and innovation in the broadband market.

Meanwhile, Nexfibre, a full-fibre network provider, has unveiled plans to invest £1 billion in broadband infrastructure this year alone.