InfraVia, Liberty Global and Telefónica have agreed to acquire Substantial Group, the parent of Netomnia and retail ISPs YouFibre and brsk, in a £2 billion (€2.34 billion) deal through their existing fibre joint venture, nexfibre.
The partners say the transaction will unlock £3.5 billion of investment and create a scaled wholesale challenger to BT’s Openreach as the UK market enters a long-anticipated consolidation phase.
Substantial is described as the UK’s second largest alternative full-fibre platform, expected to have more than 3.4 million fibre premises and over 500,000 customers by completion. nexfibre says the combination of its build, Netomnia’s network and a fibre upgrade programme covering 2.1 million Virgin Media O2 HFC premises adjacent to Netomnia will take the enlarged platform to around 8 million full-fibre premises by the end of 2027.
When added to Virgin Media O2’s own growing fibre footprint, the companies are positioning the two-network system as a national-scale alternative for ISPs looking for wholesale reach beyond Openreach. The parties say the two networks together would reach 20 million premises, with Virgin Media O2 also committing wholesale traffic across 4.6 million “overlapping and adjacent” homes as part of the deal economics.
However, Simon Holden, CEO of rival CityFibre said there was “an 80% overlap” between the players and warned the deal could “significantly reduce competition”, urging the CMA to examine it closely and arguing it risks re-establishing an “ineffective duopoly” between BT and Virgin Media O2.
The transaction structure splits network and retail. nexfibre is acquiring Substantial Group for an enterprise value of £2 billion, but will sell the retail business — including the YouFibre and brsk brands — to Virgin Media O2 for £150 million. The aim is to keep the retail offer running post-close while the wholesale platform scales, with Virgin Media O2 paying wholesale fibre access fees as customers migrate onto nexfibre-served fibre footprints, including within 2.5 million homes that overlap the Netomnia build where wholesale fees begin at closing.
Funding includes £1 billion of new net money for nexfibre, made up of £850 million from InfraVia and £150 million jointly from Liberty Global and Telefónica. In exchange for the traffic commitment, Virgin Media O2 is set to receive around £1.1 billion in cash and an indirect 15% stake in nexfibre, with proceeds largely earmarked for deleveraging, alongside the £150 million retail purchase. Completion is subject to regulatory approvals and is targeted for Q3 2026.
