Virgin Media O2 Ponder £2bn UK Broadband Deal to Acquire Netomnia UPDATE
A major newspaper has this morning claimed that broadband giant Virgin Media (O2) have opened non-exclusive talks with alternative full fibre network operator Netomnia (Youfibre, Brsk), which could result in a £2bn deal that would expand VMO2’s network coverage and potentially remove a key competitor from the market. CityFibre are also said to be interested in the altnet.
At present Netomnia (Substantial Group) is one of the UK market’s largest altnets and has deployed their Fibre-to-the-Premises (FTTP) based broadband service to cover 2.8 million UK premises RFS (inc. 400,000 customers) – available across parts of over 90 cities and towns. The group aims to cover 3 million UK premises by the end of 2025 and then 5m by the end of 2027 (inc. 1m customers by 2028).
According to the FT (paywall), two people “familiar with the matter” have claimed that VMO2 and Netomia are now in talks over the potential consolidation deal. Such an agreement, if it were made, may involve a combination between nexfibre and Netomnia rather than Virgin Media and Netomia, which we suspect might reduce the chances of regulatory scrutiny due to nexfibre being a semi-separate company, albeit with shared parentage.
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Just to recap. Nexfibre is a £4.5bn joint venture between Telefónica, Liberty Global and InfraVia Capital Partners (here). The network has so far covered around 2.4 million UK premises with their new full fibre network, which is being built by Virgin Media’s engineers. But the operator’s original plan to cover “up to” 7 million UK homes (starting with 5m by 2026) in areas NOT currently served by Virgin’s network of 16m+ premises was recently dealt a blow by Telefonica’s strategic review (here) and currently has no clear plan for going beyond 2.5m premises.
However, we can’t help but feel that a consolidation between these two would be a tough sell, particularly due to there being quite a lot of overbuild between VMO2/nexfibre and Netomnia’s respective networks in urban areas. On top of that, Netomnia has positioned itself as being more of a cutting-edge but low cost broadband disruptor, which differs significantly from Virgin Media’s perhaps more historically premium (pricing) approach.
Suffice to say that such a deal may also be unlikely to go down well with customers of Netomnia’s retail ISPs, many of which will have previously chosen them to escape from major ISPs, like Virgin Media, and their cycle of inflation busting mid-contract price hikes and expensive post-contract pricing. On top of that, there’s the usual complexities over differences in network infrastructure and technology, which could be quite tricky to resolve.
On the other hand, it’s worth remembering that such talks aren’t unexpected in today’s market, particularly with so many altnets being under pressure from competition, rising build costs and high interest rates. Netomnia has been one of the few altnets to continue building through this phase of the market, seemingly with some success, but they’re not immune to the challenges.
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Just to underline the above point, the same newspaper claims that CityFibre has also approached Netomnia for talks and that a deal “was still a possibility“. Such a deal would actually seem to make a lot more sense, given how there’s significantly less overbuild between this pair and consolidation would create serious competitive scale in the altnet space (CityFibre covers about 4.5m premises). But it would also create a group that carries a huge amount of debt, which might be an issue for an alternative deal with VMO2 too, depending upon the approach.
In the end, none of these talks should be considered as unexpected in today’s consolidation minded market, where everybody seems to be talking to everybody else. But whether any of this leads to a real agreement and even more serious talks is another matter entirely. Take with a pinch of salt.
UPDATE 4:04pm
Various other sources have since informed ISPreview that Netomnia has engaged in talks with both parties and are currently conducting an independent audit of their network infrastructure. The talks with CityFibre are even claimed to have reached the due diligence stage, although it sounds like VMO2 may have also decided to jump in the ring; something CF and its major ISP partners aren’t terribly happy about (there’s allegedly been talk of a competition complaint).
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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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If/when we see consolidation of the alt net market, I just hope we end up with a third major competitor and not just everything folding into VMO2 like we saw with cable.
I haven’t considered Virgin Media to be premium.
Wait till you get to the end of your first contract term and they jack-up the prices to something silly. I went from paying £78 or so for our bb bundle with TV to like £140+ and left.
The only thing “premium” about VM is the price.
Netomnia are overbuilt with VMO2 HFC in Swansea. If a lot of their overbuild with VMO2 is in HFC areas then it could be an easy way for VMO2 to upgrade these areas to FTTP.
That’s a bold use of the word ‘easy’.
I really hope this doesn’t happen. I’m on FTTP with VM (older none symmetrical, not XGS) and Netomnia are just finishing up going to ready for service. We have no FTTP from Openreach so it’s VM or nothing. VM know this and they charge as such.
My best deal with VM is £43 (with one more price rise next April) for M500. Netomnia is £34 for 1GB symmetrical.
the service you have is RfOG (Radio Frequency Over Glass).
I agree this wont sit right if they take out netomnia….. however!
I suspect this is Telefonica’s doing. Nab Netomnia, consolidate VM/O2 into just O2.
incorporate the streaming platform, ditch the old coax tv, and operate then as a direct service-for-service technology-for-technology rival to EE and Voda3 complete with better coverage as right now only VM/Nex areas can be supplied.
likely then also to operate on nexfibre, netomnia, and also then run on cityfibre for coverage. (eventually upgrading HFC/RfOG to FTTP either via upgrades or de-facto default as netomnia is present and any other altnet they jump on board with)
‘VMO2 to aquire Netomnia’ …..Don’t do it Jeremy…should be the reverse!
If only money wasn’t needed to buy things.
Cityfibre won’t be able to fund 2nd to get netomnia. They would rather have several smaller alt nets for a several hundred million each I would say. Also VM would just suck the life out of anything they touch. It’s quite sad really.
Nooooooooooo!
Need I say More?
No, No, No.
If You will go for Virgin, I can stop waiting for Youfibre. Been waiting 4+ years (PE133TL).
Almost same happened with Upp, they was very close to my street and then was sold to Virgin.
I’m just happy that Cityfibre closing in as sick of Openreach non-symmetric speeds.
“sick of Openreach non-symmetric speeds”
Lucky for you, G-PON is all I can get but I will take it once as im still on VDSL!
Openreach are testing XGS-PON so all good and will deploy that eventually.
What is your killer app that makes symmetrical so essential?
FTP and about 5TB of files to back up twice a week. Which can saturate my line.
You were asking?
I was asking Norman as he’s mentioned needing higher upload many times.
Backups are a thing, sure. Not exactly a killer app given they can be done incrementally and constantly with a full one only at the start and very occasionally after that to cold storage.
Brute forcing with frequent full backups, sure. I know a couple of people who do that. Nothing some software can’t sort and have done for one of them.
I was thinking more hosting own services or streaming very, very high quality video. Things that aren’t doable without the higher upload 🙂
I had to have a little chuckle at this, as currently netomnia are building in Bristol, where VM have presence.
This would be disappointing as there needs to a better alternative to VM.
£2bn seems a overpriced for what is ultimately a pile of OLTs and ONTs (which may not mesh with the network designs that VM and Nexfibre use). I gather they are heavily reliant on Openreach for exchange and physical plant so there’s not a lot of meat on the bones.
You’d hope that VM have learnt from the HFC integration challenges and would not want a repeat of the same here.
Still, perhaps new ownership will fix the IPv6 issue?
Netomnia are pretty much using 100% Openreach PIA, mind you so is a fair amount of Nexfibre’s in Banbury.
Jeremy don’t do it!
We cannot have anything good in this country because any successful new business gets sucked up by a wealthy old encumbent. I would like to hope such a deal would be prevented as anti-competitive.
No one forces a business to sell. That is a decision for the owners, and if they want their big pay day (or more often than not for startups, cutting their losses) then they are fully entitled to get it.
I would be doubtful that some tiny altnet is going to end up on the radars at the CMA or Ofcom, especially not one that has essentially total overlap with one or more other fibre operators. Orange/T-Mobile and VF/3 were far more consequential decisions and they went through.
Ironically a lot of UK startups the end game is to sell or to just make enough money before going belly up, we such a short termist country.
Oh come on.. VM had no interest in our road dispite being near by – and now they want to buy it so they can get to me? They could have just done FTTP to all 61 houses via IPA.
If vm buy Brsk I am leaving. I am sure others will too especially those hwo moved to get away from VM!
Also CF – who buult 1/4 of the town and then left? No thanks
That confirms why the mass network audits are happening right now then!
I hope this does not happen.
I’m with VM at the moment and we have BRSK in the area which is beneficial in two respects:
1. It keeps VMs prices down
2. Its a more than suitable provider both in performance and price should I ditch VM.
This should not be allowed to go ahead should it come to fruition.
Jump on it now mate – they are doing 2Gbps for £35 a month. Or lower speeds for much much less than VM can do them for.
“would be a tough sell, particularly due to there being quite a lot of overbuild between VMO2/nexfibre and Netomnia’s respective networks in urban areas”
From previous checks using the ThinkBroadband Coverage maps, I think that there is actually relatively little overlap of the Nexfibre and Netomania networks.
I don’t think they split that any more. But now include Virgin Media into that, since they’re generally part of the same overall network strategy.
@Mark:
Yes, I was wondering how accurate the maps are, but they do show the Nexfibre locations in a different colour from VNO2 networks, so I was assuming that the distinction is still being maintained. Looking at just the Nextfibre locations suggests that there is little actual overlap – at least in the areas I checked.
@Mark:
P.S.
Just referring back to the Thinkbroadband “State Broadband” review from September 2025, the matrix in the “Fibre Overbuild by Provider” section suggests that the overbuild between the two amounts to less than 10pc.
As above, try including Virgin Media’s network into that. I don’t think many people buy that nexfibre is an independent altnet just doing its own thing, the strategies are aligned and key parents the same, hence why I said VMO2/nexfibre and not just nexfibre. The overbuild for the pair is very heavy.
The strategic benefits of such a deal are compelling, but with the state of the economy, the market sector and the levels of debt it has echoes of many of the overpriced takeovers of the boom years. At the moment, financial institutions are doubling down on the reassessment of the debt ratings, so there might be a lot of concerns about how this would be funded. To make it work, they would have to move very fast on any expected synergies, and it might adversely impact investment in the fixed-line side of the VMO2/Nexfibre infrastructure over a two to five-year period.
I wonder if part of VMO2’s calculation is to prevent it being acquired by CityFibre which also appears to be heavily overbuilt with VMO2. CityFibre & Netomnia together could present a much larger challenge.
@Mark:
Yes, there will no doubt be strategic relationships and a symbiotic relationship between VMO2 and NexFibre, but in terms of broadband deployment, there is apparently little overlap between Netomania and NexFibre. Against that, the potential loss of third-party customers of Netomania will likely come in the short to medium term.
However, along with other factors, we also do not know how “talks” have been going on between VM02, its owners, and Netomania nor what VM02 might have in mind in terms of savings from synergies with respect to the heritage network.
If there were to be a deal involving the acquisition of Netomania, that would cause a stir amongst the remaining sizable AltNet network providers on the basis that their exit options would be reduced for the next two years or so.
However, such a deal, if a full acquisition is on the table, could still be just out of reach, given the financial obstacles and that is before looking at the potential costs of integration of the combined business.
As everyone else is saying. NO THANKS!
Escaped 10 years of Virgin Media contract negotiations and haggling to a much better service with Netomnia.
Please don’t do it!
This would ultimately be bad for customers in many ways, and if VM did acquire Netomnia, then I would stay with BT indefinitely [or move to EE if I had to]. I don’t have any intention of using any ISP that has involvement with VM, due to their poor reputation [despite all the people complaining about BT, I have never had any issue with their service and I’ve been with them since 2011 or thereabouts].
No wonder O2 have introduced higher price rises then built into mobile contracts
So this will exclude VM areas then if its Nexfibre not VMO2.
Lets hope Cityfibre get there instead of Vermin Media. Whilst people in ALTNET areas stay on VM, they are funding VM’s strategy of no competition…..
I can’t help feeling part of the strategy is to get there before CityFibre. A lot of the CF build is already in VM areas and if they took over Netomnia they would be breathing down VMs neck even more.
hopefully not with you fibre just because they don’t increase prices mid contract
Christ, no! I just left Virgin for YF this year and couldn’t be happier with the service. This would be a huge downgrade if Virgin took over.
Not surprised to see the hostility against VM, their idea of premium, is pricing. If Netomnia are taken over let’s hope it’s with City Fibre, rather see them staying as they are, as no doubt most would agree.
That suggests a valuation of £700 / THP, which would be very attractive to Netomnia, given their build costs of c.£200 / THP. I can imagine Jeremy and the investors jumping at such an offer! A nice earner of c.£1.4bn!
I am the same where I live it was either Virgin Media or nothing until Youfibre came along. I have been with them since 2023 and have stayed with Youfibre because of the service I get and plus no mid-contract hikes. Furthermore, I just hope they don’t sell out to Virgin as Openreach have now come to the area, and it will be either Openreach or Virgin and I wouldn’t touch both of them with a barge pole. If Netomnia is to sell to anyone, Cityfibre would be best.
F No
NOOO, GOD! NO, GOD, PLEASE, NO! NO! NO! NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!
Oh please no.
I was hoping to move over to BRSK who are building around me when my contract ends with VM.
I want to get away from VM.