Nexfibre Cut 2025 UK Full Fibre Target to 2.5m Premises as VMO2 Pause NetCo Plans
Liberty Global has confirmed that sibling nexfibre, which is working alongside UK ISP partner Virgin Media to deploy a new 10Gbps full fibre broadband (FTTP) network across over 5 million premises (c.2.2m have already been built), has scaled back its coverage target for 2025 to 2.5 million premises passed. At the same time, VMO2 “have paused our NetCo plans“.
Just to recap. Nexfibre is the product of a £4.5bn joint venture (here) between Telefónica, Liberty Global and InfraVia Capital Partners, which originally aimed to deploy an open access full fibre 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 (Telefonica and Liberty Global also own Virgin Media).
However, the latest results from Virgin Media (VMO2) – published this morning (here) – revealed somewhat of a slowdown in FTTP build at nexfibre, which only added 165,000 premises in Q1 2025. But we had been expecting them, at this stage of the deployment, to start moving a bit faster in order to meet their first overage target (i.e. the change in pace came as a bit of a surprise).
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The answer to all this came when Liberty Global published their investment report, which was followed by details from today’s investment call – revealing several key developments. According to the report, Liberty Global are “adjusting nexfibre’s build ambition to 2.5 million cumulative premises (currently at 2.2 million) by year-end 2025, retaining capital discipline in an increasingly irrational altnet environment and remaining opportunistic around M&A” (nexfibre had previously been adding c.1 million premises per year).
In addition, readers may recall that Virgin Media’s parents had been looking to raise an additional investment of £1bn to support the NetCo project (here), which some reports speculated could hand investors up to a 40% stake in the wholesale business. But this too has now also suffered a setback. “We have decided to pause VMO2’s potential NetCo stake sale process to align with our JV partner, but remain opportunistic on both network upgrade and development opportunities,” said Liberty Global’s results.
Since then the CEO of Liberty Global, Mike Fries, has added a little bit of extra colour to these decisions.
Mike Fries said (investor call):
“In the UK, we are confirming today that we have paused our NetCo plans at the VMO2 level in order to align with Telefonica’s announced strategic review. At the same time, nexfibre has updated its plans, and will now target 2.5 million fibre homes by year-end on a cumulative basis.
Let me say first that we pride ourselves on being good partners, and we appreciate and understand Telefonica’s position. Undoubtedly, we [will] have more to say about all of this as the year unfolds. In the meantime, there are multiple ways to continue to strengthen VMO2’s competitive position in the UK. Our services already reach 7 million fibre homes, and for reference, VMO2 achieved record sales and net adds last month on the nexfibre footprint. So stay tuned here.
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So anyway, on the bigger issue of NetCo, I would say the following, yes, the market is evolving. And certainly, it would be potentially better to have — to be front and center with our original plans. However, nothing prevents us from entering into strategic dialogue with operators around things like consolidation.
I’ll remind you that the acquisition we did earlier in the year was done by nexfibre and VMO2. So we didn’t have a Netco in that instance. And we still have a very large broadband base. We have an 18 million home network or 16 wholly owned. There are unlikely to be significant developments in the rationalization of AltNets to fibre in this market that we aren’t part of in some way. And I do believe that Telefonica would answer that question similarly, which [means] we will stay opportunistic and we will take action if things are presented to us that require immediate action, where we’ll evaluate those. So that’s where we sit.”
Mike also highlighted how they’ll “stay opportunistic and take action” where logical and said that “we’re not closing any doors”. In addition, none of this has any impact upon Virgin Media’s ongoing effort to upgrade their legacy Hybrid Fibre Coax (HFC) network to FTTP (XGS-PON) by 2028, which is still proceeding and costing around £100 per premises passed (affordable and a necessary enhancement to stay competitive).
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On the nexfibre front, the JV partners appear to be responding to pressures that exist in the market and there’s a strong indication that they now view consolidation (i.e. hunting for deals with struggling rival altnets) as being a smarter use of capital than fresh build, particularly given the rising risk of overbuild with some of those same competitors.
However, consolidation tends to be a slow and complex negotiation / process, especially while some altnets continue to have an inflated view of their own value. Time will tell how well they do on this front, particularly with CityFibre also actively looking to secure similar agreements.
The situation does of course place a big question mark over how Virgin Media will proceed now that their own NetCo ambitions appear to be on a sort of pause. Creating a viable wholesale model, without causing serious harm to their own retail base at Virgin Media, remains a particularly difficult challenge.
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, particularly while so much of VM’s network is still stuck on coax (they’d only wholesale the XGS-PON fibre).
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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. So far, the only ISPs of any note that seem to have committed to the NetCo are those with shared parentage (Virgin Media and giffgaff), which is a problem.
Overall, the suggestion seems to be that a lot of the pressure to pause and take stock has come from Telefonica’s new strategic review, but it may also be a generally prudent thing to do – given the complex market dynamics. But quite what will emerge from all this remains to be seen.
UPDATE 3rd May 2025 @ 7:18am
The Telegraph (paywall) has provided a little more colour for the source of those pressures at Telefonica (here). The Spanish firm is feeling a fair bit of political pressure after suffering a €49bn (£42bn) loss last year. Both Telefonica and Liberty Global now also have the right to kick off an initial public offering (IPO) for VMO2 after a lock-up period under the terms of the £31bn merger expired last year.
Suffice to say that there’s a lot of uncertainty around Telefonica’s new leadership, and we’re feeling the impact of that in the UK.
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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Having dealt with VM a few times I probably have no right to be shocked at how much of a hash they are making the process of “put fibre into the ducts you have already, run your own branded services as an anchor tenant on this new network, wholesale the network to other ISPs” but they do still manage to surprise me.
“none of this has any impact upon Virgin Media’s ongoing effort to upgrade their legacy Hybrid Fibre Coax (HFC) network to FTTP (XGS-PON) by 2028”
Too slow. Only some areas done. Mine isn’t and the arrival of both BT and ALTNET means Virgin is dumped this year. Who wants atrocious customer service frequently getting contracts wrong and anything else and constant price rises and out of contract pricing that is simply laughable. You can never add or remove as service without issues or being told it’s more expensive as a result of removing anything. Only those areas that have no ALTNET or BT FTTP will be screwed as they will be milked.
Just my opinion/experience over 15 years, and many other VM customers on their own customer forums
Every time I have to do the renewal dance with Virgin it annoys me more and more. I asked them early on if I could fix for 5 years, seems they change the contract lengths randomly.
I know they ike to rip people off with the contracts jumping from £35 to £85, but if somebody if going through enough hopps to get to retention, just give them a flat contract with none of this idiocy. The actual technical service is great, it’s when I have to deal with humans it all goes wrong.
My experience as well
Sucks to be Giff Gaff.
Indeed. Like the village I live in. Choice is next fibre up to 2gb/2gb or 15mbit fttc open reach. And boy are virgin O2 milking the fact. £6 increase after 1st year. Trouble is open reach/alt nets will not come as apparently it’s a difficult build but next fibre did it easily in a month. Don’t get it lol
I wouldn’t be surprised if more is still to come out of VM… received an email at the beginning of the year that fibre was available in my area – via NextFibre – only to receive an email a few weeks later withdrawing the offer “while they sort things out” and I’d get an update in the next few weeks. That was nearly 4 months ago.
To make matters worse, they seem to be operating two completely different systems. One says that fibre is available in my area, and the other says it isn’t, and neither seems to be able to communicate between the two
Sure, I’ll go for a symmetrical 10Gbps line with Nexfibre. It’s right outside our home, too, but for the fact that only Virgin can provision it (up to 2Gbps), and I wouldn’t touch Virgin ever again.
Made the mistake of dabbling with the idea a few months ago and instantly regretted trying to communicate with their sales staff, before realising that they provide you not with an ONT, but a ghastly router that doesn’t even even officially support modem mode–why would I want to use Virgin’s awful hardware when mine is infinitely better and preferred?
When I can get Nexfibre through IDNet, I’ll grab it in a heartbeat. Until then, I really couldn’t be bothered. I will never sign up with Virgin again. I think there are a fair few other previous customers of theirs who feel similarly.
I don’t miss the call-centre equivalent of throwing darts to get through to the one person who is not only competent and speaks English well, but also is the right department for dealing with my particular enigmatic dilemma.
Bleh to Virgin. They need to come to terms with the fact that their target market for fibre isn’t necessarily anywhere near the same as their TV market.
It is wholesale, so there are other providers on it or will be, but I do get your point about Virgin, never dealt with them myself, but from what I have read and heard over the years, I think I prefer not to deal with them and even if NexFibre does come here, I don’t think I will change to it. Happy with who I am with, at the moment anyway
Oh, I wonder if that will have any effect on their build plans around here next year.
Interesting.
Curve ball thought. Buying the TalkTalk base gives room to pause on the heavier fibre network investment for the time being.
Pausing NetCo plans sounds like they didn’t get the interest they want to pursue it quickly
“… retaining capital discipline in an increasingly irrational altnet environment and remaining opportunistic around M&A …”
This is a very clear statement on the health of AltNets. If this develops into a major round of cascading consolidations, the prices charged to customers are going to very quickly start aligning with the likes of VM02.
VM simply do not get it, as the number of alt nets offer a vastly superior symmetrical service. They are going the same way BT was going before others were allowed to have access to their systems.
So amy people are leaving them, so more power to the alt nets.
Actually consolidation could mean a slight increase of price, but no proof of VM level of price increases… the BT spy is back.
The AltNets are offering heavily discounted prices on premium products while lacking the scale to make it profitable. There evidence is there for all to see.
Define “heavily discounted “? While before the alt nets, we in the UK had to pay either BT or VM. The number of pretty upset people on trust-pilot UK as regards to these two speak for themselves.
It is clear for all to see, how much better we are in the UK since alt nets arrived, real FTTP, fantastic speeds which will scale up long term good for them, means finally good for the UK.
Two main ISP providers are in panic mode. When it used cost an absolute fortune to get good to excellent speeds, now it is a reality. No thanks to the main ISPs of BT and VM.
I have been to E Europe, they had the foresight to install FTTP even to the smallest villages, as the entire country is gaining a better lifestyle. But in the UK we have, until recently been substantially held back.
‘Heavily discounted’ = your monthly rental doesn’t even cover the interest on the loan taken out to install your service. You’re paying a fraction of the real cost and when the investors demand their money back and the interest owed you’ll find out the true price.
“While before the alt nets, we in the UK had to pay either BT or VM. ”
That’s funny – I was using an ISP other than BT long before the altnets arrived. I can’t get an altnet nor can I get Virgin.
“real FTTP”
what makes an altnet’s FTTP more “real” than Openreach’s FTTP? I assume you’re going to bring up XGSPON or symmetric service. What good is a nominally faster upload when you’re hindered by CGNAT as loved by most altnets?
“I have been to E Europe, they had the foresight to install FTTP even to the smallest villages, ”
Easy to do when you have lower labour costs, none of the red tape, and most importantly an actual need to replace all that soviet-era junk.
That point is true, but at least they are turning away from debt.
I do not know that I am on a CGNAT, but I get throughout the day circa 950 symmetrical.
If you cannot get an alt net, then get your neighbours and yourself to complain to an alt nets provider that is in your area. In E Europe, the amount of complaints from locals about “red tape” is legendary, since wages are far lower then costs will be as well to supply fttp. But the governments at least mad sure that full fttp was being built across their countries.