Liberty Global and Telefónica have announced the creation of a new fibre joint venture with the investment firm.
The £4.5 billion investment will see up to 7 million homes passed with a new wholesale full fibre network.
Liberty Global and Telefónica will jointly hold a 50% stake in the JV through a holding company, with InfraVia owning the remaining 50%. Telefónica Group’s participation will be held through Telefónica Infra (its infrastructure unit).
The partnership will initially roll out fibre to 5 million homes not currently served by Virgin Media O2’s network by 2026, with the opportunity to expand to an additional 2 million homes.
Virgin Media O2 will commit to being a wholesale customer of the new network from day one, which will extend its total fibre footprint up to 23 million premises. It will also play an integral role by providing its well-established network expansion expertise, systems and relationships to the entity.
“This multi-billion pound investment is a vote of confidence in Britain that will take Virgin Media O2’s fibre footprint to 80% of the UK, boosting our position as the biggest challenger in the market,” said Virgin Media O2’s CEO, Lutz Schüle.
“Virgin Media O2 will play a crucial role by providing extensive build talent and expertise to the new venture, as well as being a major wholesale customer which fuels fantastic expansion economics from the get-go. Alongside our existing gigabit network, other operators will be presented with a sizeable and attractive wholesale opportunity that will enhance competition and choice like never before.”
Virgin Media O2 is the UK’s largest gigabit broadband provider passing 15.9 million premises with speeds of 1.1Gbps.
It is expected that this transaction will close in Q4 2022.