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Virgin Media O2 reveals NetCo, a new company to rival BT Openreach

Written by Tue 20 Feb 2024

Virgin Media O2, with shareholders Liberty Global and Telefónica, announced it will establish a separate national fixed network company, called NetCo, to rival BT Openreach.

The telecommunications company said NetCo also aims to promote full fibre adoption, introduce new financing options, and facilitate altnet mergers.

NetCo will include the Virgin Media O2’s cable and fibre network assets, covering 16.2 million premises across the UK. These premises will undergo upgrades to full-fibre in the upcoming years.

The new entity will align with Virgin Media O2’s current network strategy and will focus on completing the company’s ongoing fibre upgrade programme.

This structure offers flexibility for future financing and the potential to engage in consolidating alternative networks. It will also facilitate the pursuit of wholesale opportunities as a significant network alternative.

CEO of Virgin Media O2, Lutz Schüler, said NetCo will underpin the company’s shift to a fully fibre network, while reinforcing its position as the ‘leading challenger of BT Openreach in the market’.

“This is a logical evolution of our fibre strategy that creates a clear, focused, and scaled network entity within the Virgin Media O2 family,” said Schüler.

Virgin Media O2 said its consumer units, B2B units, and its mobile network will continue to provide connectivity services to millions of users. Through a wholesale agreement, NetCo will connect Virgin Media O2’s fixed customer base, providing revenue from day one of operation. 

The independent fibre joint venture involving Liberty Global, Telefónica, and Infravia, named Nexfibre, will remain separate. It will concentrate on expanding fibre networks into greenfield areas.

Once all planned fibre builds are completed, NetCo and nexfibre networks will collectively reach up to 23 million homes, contributing to increased fibre network availability across around 75% of the UK. Currently, Virgin Media O2 and nexfibre together cover over 4 million premises with full fibre.

Additional details and operational timelines will be announced at a later date, pending regulatory approvals.

In 2020, Virgin Media and O2 confirmed their £31 billion ($39 billion) merger. The deal united O2’s 34 million customers on its mobile network with Virgin’s 5.3 million broadband, pay-TV, and mobile users.

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Written by Tue 20 Feb 2024

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