Liberty Global CEO Updates on Virgin Media’s UK Wholesale Broadband Plan
The CEO of Liberty Global, Mike Fries, has said they’ve made “significant progress” on their plan for opening up Virgin Media’s existing UK fixed line broadband network to wholesale (rival ISPs) via a new business (NetCo) during the first half of 2025 (here). Fries also confirmed they had received “proposals from a handful of the strongest infrastructure investors” for a stake in the biz.
Just to recap. The merged business of Virgin Media and O2 (VMO2), which is backed by parents Telefónica and Liberty Global, published their latest quarterly results yesterday (here), although this included very little detail on their NetCo plans, except to say that it was “on track” to “support the long-term underpinning of fibre upgrade activity and take up“. But we’ve since got a bit more detail as part of a related investor call.
At present, Virgin Media’s existing fixed line broadband network, which covers just over 16 million premises via a mix of Hybrid Fibre Coax (HFC) and FTTP (RFOG and XGS-PON) lines, is a closed platform that does NOT allow rival ISPs full access via a wholesale product (although there are some limited / niche arrangements with OFNL and Home Telecom etc.).
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As a complement to the above, VMO2’s parents – Telefónica and Liberty Global (inc. support from InfraVia Capital Partners) – also setup a £4.5bn joint venture called nexfibre in 2022 (here), which is deploying an open access wholesale full fibre (FTTP) network to reach “up to” 7 million UK homes (starting with 5m by 2026) in areas NOT served by Virgin Media’s own network of 16m+ premises. Virgin Media is currently the only official ISP on this network (here) and nexfibre has already covered over 2 million premises.
However, in February 2024 VMO2’s parents finally confirmed the long-awaited announcement that they would be opening up Virgin Media’s closed network to wholesale via a new NetCo business, which they said was expected to go live during the first half of 2025.
Recent media reports have indicated that VMO2 may have made progress on their efforts to raise an additional investment of £1bn to support the NetCo project (here), which is understood to have recently received several non-binding offers from investors (potentially including BlackRock and CPP Investments etc.). The effort could hand such investors up to a 40% stake in the NetCo business. The CEO of Liberty Global, Mike Fries, has now confirmed those reports and provided a small update to investors.
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Mike Fries, CEO of Liberty Global, said:
“We also announced last year our intention to create a fixed NetCo in the UK market to accelerate and fund a portion of our fibre [FTTP] build out and to provide a vehicle for what we expect will be a rapidly consolidating infrastructure market. And I’m happy to report that we are making significant progress on this front.
The operational and financial perimeters of the UK NetCo have been established. They represent around 16 million homes and over £1 billion of EBITDA. But more importantly, as of last week, we are in receipt of proposals from a handful of the strongest infrastructure investors in the business who have indicated an interest in participating with us in what will be, I think, the only viable long-term competitor to BT’s Openreach, so more on that to come.”
At present, the combined FTTP base of both nexfibre and Virgin Media is 6.4 million premises passed, which will of course rise rapidly as their HFC + RFOG areas are upgraded to FTTP and nexfibre continues its network expansion efforts. This is already a significantly larger potential wholesale base of FTTP lines than their closest altnet rival CityFibre can muster (4.3m), albeit still well below Openreach’s 17m+. But by 2028 the combined group could reach up to 23 million premises, which would be hard for even consolidated altnets to reach, albeit still below where Openreach will be (c.27m, rising up to 30m by 2030).
The big challenge for such a NetCo will be in its ability to attract significant ISP support, at least beyond those already owned by the wider group (i.e. O2, Virgin Media, Giffgaff). Potential ISP partners will be looking to be treated fairly (wholesale agreements), which is always a tricky thing to balance vs the desire by some for exclusivity agreements. One benefit of Openreach’s heavily regulated business is that it affords ISPs some protection against unfair practices, and competing with that is a challenge.
The need to deliver attractive pricing is another difficulty, particularly given Virgin Media’s own retail reputation for hefty post-contract (after discounts) pricing. Alternative networks in this space have been aggressive on price and associated ISPs are often able to offer promises of “no mid-contract price hikes“, which is something that the established giants tend to struggle with.
Lutz Schüler, CEO of VMO2, told investors:
“I mean, as you know, we are not publicly differentiating in our net add growth between our existing coverage and nexfibre. So therefore, you get the blended number. I think underlying, of course, it shouldn’t be a surprise for you that in the BAU coverage, we are losing customers, small amount, but we are losing it. And in nexfibre, we are growing because we are penetrating a new network.
Now what I can tell you is that our losses in our existing coverage are significantly less to other big market players. This is what we believe. But aggressive [alternative networks], yes, with very aggressive prices, are getting some customers also away from us.”
Nevertheless, over the longer-term, Virgin Media going wholesale is still a big deal for the market and one that will trigger plenty of disruption for everybody (retail ISPs, alternative networks, Openreach and even Virgin Media’s own retail base), while at the same time increasing market complexity for consumers (as if it wasn’t already confusing enough).
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However, this approach will ultimately sink or swim based on whether or not it can get the core ingredients right, and ideally attract support from key ISPs, such as Vodafone, TalkTalk and Sky Broadband (all three already have agreements with Openreach and CityFibre). The market is likely to go through some big changes over the next few years as all of this plays out, so buckle up.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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More competition can only be good news and the upgrade to FTTP will also benefit those where OP and others haven’t plans to build any time soon.
Are there any available plans that show when/where Project Mustang will be upgrading?
An admission that ALTNETS are beginning to bite, but not yet as hard to VM as BT is what is in the text. I know from our family/friends, that 5 of us are switching from VM to You Fibre as service becomes available or as our contracts expire with VM.
Project Mustang is now Fibre Up, either way there are no published plans of the rollout
Fibre Up is a reference on streetworks not the name of the project. Mustang was only used as a reference for streetworks in the trials.
What is the project called then?
Mustang.
The project name was in the streetworks references for the three trials only,after that it was generic streetworks references for a while and settled on a standard format later involving FIBREUP, the headend or hubsite the OLT is parented from and the cabinet ID for OLTs.
L4 distrubtion cabinets have headend, 2 character reference for the OLT, 2 numbers showing L3 cabinet serving the L4 distribution cabinet and 2 letter code for the distribution cabinet, L3 cabinets don’t have the 2 letter L4 code at the end:
OLT: NK128FIBREUP-SEAC-X-YE
L3: NK128FIBREUP-SEAC-YE03
L4 off that L3: NK128FIBREUP-SEAC-YE03AE
Another L4 off that L3:NK128FIBREUP-SEAC-YE03AF
Nearby L3 also off OLT YE: NK128FIBREUP-SEAC-YE02
One of its L4s: NK128FIBREUP-SEAC-YE02AK
Off same OLT, SEAC-YE, different L3.
Streetworks reference examples for OLTs:
OLT + additional: NK128FIBREUP-SEAC-X-XE-1
Standard OLT build: NK128FIBREUP-LEE2-X-XC
Standard OLT: NK128FIBREUP-LEE2-X-XG
If unblocking ducts or pulling fibre not directly related to cabinet format similar to some Nexfibre work with headend then WP for Work Pack I believe and the job number in the work pack, prefixed with FIBREUP, else uses cabinet reference:
Reference: NK128FIBREUP-SEAC-X-YCO3
Description: de-silt chambers, install microduct and clear any blockages
Problems getting microduct to L3 03 off SEAC-X-YC so uses that cabinet reference.
One not so directly related to a cabinet:
Reference: NK128-FIBREUP-SEAC-WP8-8
Description: Clear blockages in the footway
I think job 8 of work pack 8.
I think we’ll have to disagree on the renaming. All documentation I’ve seen shows Fibre Up being the new name for the entire project, not just the streetworks.
It says what it does on the tin, which Mustsng didn’t.
I’m out of date in that case, thanks for the correction.
So will VM & Nexfibre be a single wholesale offering or will ISPs have to make separate agreements? It doesn’t seem to be entirely clear.
VM’s NetCo is separate to Nexfibre, so in all likelihood they’re be separate commercial agreements.
@Ben just more work for the ISPs then, hardly a great selling point.
Netco and nexfibre share some common ownership (Telefónica and Liberty Global) and could publish very similar or even identical JSON-based APIs for ISPs. These APIs, together with the API documentation, will be needed by the ISPs’ developers for a variety of functions including ordering, provisioning, fault management, usage and billing. I’m retired but if I were still a developer I know I could use several scripts or languages including Javascript and Java to code to these APIs.
I wonder how many ISPs will be happy to wholesale over the hybrid coax network. They’ll have more confidence in performance in FTTP areas so this might mean it could be a while before major ISPs look to VM-NetCo for wholesale.
Wholesale does make sense; if they want an ROI on their FTTP network the vertically integrated single ISP model will limit returns. The fact is consumers tend to be wedded to certain ISPs for multiple services (e.g. TV etc) and VM has always had reputation issues. Maybe VM should spin up their own wholesale ISP with new branding along the lines of what PlusNet was for BT.
That said how much will wholesale eat into the VMO2 retail operation? ~32% takeup across their network at present so how much higher could wholesale realistically increase this to where Openreach or other FTTP is available? They’d need to undercut other wholesale networks by a significant amount to gain traction, which could benefit the consumer.
ISPs cannot use Netco’s ducts to run their fibre (similar to Openreach PIA) until VM migrates DOCSIS to XGS-PON and removes the coaxial cables which are clogging up the ducts. In the interim, which will be for several years, Netco can rent capacity to provide broadband services or VM can offer reselling of its broadband at wholesale prices.
House connections will be interesting. At the moment the VM connection is direct to the VM hub with no ONT. They will need something more neutral with multiple ISP’s on their nextwork
Good point.
I’m on VM/Nexfibre at the moment but their router is pretty feature sparse. BT and Lightspeed are building locally, will be interesting to see how many houses will have multiple fibre lines in a few years when discounted periods end…
It depends on how it’s done, and here’s how it might end up.
– Under a PIA-style agreement the ISP runs its own fibre and supplies both the ONT and router.
– Under a Netco wholesale rental, Netco supplies the ONT and the ISP supplies its router.
– Under VM reselling of broadband, Netco supplies either the ONT/router hub 5X (which the ISP will likely rebrand) or the ONT and the ISP supplies its own router.
If the ISP is reselling VM’s service, then a rebadged hub 5X will probably be provided. However, an ISP’s own fibre
It’s netco wholesale rental
“But aggressive [alternative networks], yes, with very aggressive prices, are getting some customers also away from us.”
I wish I’d only left VM because of the pricing… a better product, also cheaper, was my attraction to Community Fibre!
Must be tough times when the CEO has to don his overalls and get his laptop out in the datacentre…
Well, I left VM for Community fibre last year, so far so good. A decent branded router was supplied and rated speeds are provided at far lower cost than VM. They need to sort out their horrible customer services that has allowed indian scammers to spam and ring the UK with their lies. Sadly costing people £millions to these thieves. Inconsistent pricing and no customer loyalty which results in pricing even tripling – this happened to me. No wonder people are leaving them.
Just a heads up, I’m seeing a lot of ppl saying they are moving away from VM…bla bla bla.
A lot of these altnets use VM’s dark fibres and back haul services so you are still using and paying for their services.
Rant over
Do those dark fibres come with Indian call centres and poor pricing?
I can assure Wezz, ISPs rarely use VM DF. It’s ridiculously priced compared to others or rolling your own. Even fibre tax free services (bearing in mind fibre tax applies to DF rental) such as wavelengths are eye watering money with massive installs as the transmode hardware (formerly Nokia TMS) hits your install costs at 13k min and can easily rise to 50 or 80k dependent on the chassis. And that’s the B end.
And wavelength rental at circa 35k pa for a 10gig wave is laughable.
These 2 comments shows how much ppl don’t know and just assume. 1 DF is dealt with UK based contact centres and Transmodes are VMs bread and butter.
I think you completely missed the point Wezz but nevermind…
@ FibreEng
too late as all the VM customer database is in their hands. Ever since I have moved away, the indians know this and have got far less scam calls.