Virgin Media O2’s owners have agreed to acquire challenger fibre network Netomnia in a £2 billion deal, marking a major consolidation move in Britain’s competitive broadband market. Liberty Global and Telefónica, together with InfraVia Capital through their Nexfibre joint venture, will buy Netomnia, currently the UK’s second-largest alternative network provider.
The acquisition will expand Nexfibre’s coverage to around 8 million households by the end of next year. When combined with Virgin Media O2’s existing network, the enlarged infrastructure will reach roughly 20 million premises, serving about 6.2 million customers. The scale of the combined network brings it close to Openreach, the BT Group unit, which currently passes just over 21 million premises. Following the announcement, BT shares fell 2.5 per cent.
Netomnia, founded in 2019, is one of several “altnets” established to challenge the dominance of Openreach and Virgin Media O2. Many smaller fibre providers have slowed expansion in recent years due to higher borrowing costs and weaker-than-expected customer uptake.
Rajiv Datta, chief executive of Nexfibre, said the enlarged group would provide greater scale for wholesale partners, including Sky, which has recently started using CityFibre’s network alongside Openreach. The deal allowed Virgin Media O2 to beat CityFibre, backed by Goldman Sachs, which has positioned itself as a potential consolidator in the fragmented sector.
CityFibre’s chief executive, Simon Holden, criticised the acquisition, warning that it risks creating an “ineffective duopoly” between BT and Virgin Media O2. He called on the Competition and Markets Authority to review the overlap between networks.
The Netomnia deal will be financed with £850 million in equity from InfraVia, £150 million from Liberty Global and Telefónica, and a £2.7 billion debt facility to cover the purchase and further network expansion.
Virgin Media O2 has faced recent challenges with customer retention, losing 18,000 broadband subscribers and 165,000 mobile users in the latest quarter. Analysts say the Netomnia acquisition could help stabilise growth by strengthening the company’s fibre offering.
Separately, Liberty Global has agreed to buy Vodafone’s 50 per cent stake in VodafoneZiggo for €1 billion, with plans to merge the Dutch joint venture with its Belgian unit, Telenet. The combined entity, Ziggo Group, is expected to list in Amsterdam next year.
Industry observers say the Netomnia acquisition signals a broader trend of consolidation in the UK fibre market. As funding tightens and competition intensifies, the deal could reshape the balance of power in Britain’s broadband sector, challenging smaller alternative networks and reinforcing the dominance of major players like Virgin Media O2 and Openreach.
