Netomnia Agree UK Broadband Merger Deal with Owners of Virgin Media O2 UPDATE2
Alternative network operator Netomnia (Substantial Group), which has deployed their own full fibre broadband (FTTP) network to cover 3 million UK premises RFS (inc. 460,000 customers), have today confirmed that they’ve been acquired by the owners of Virgin Media (O2) and nexfibre (i.e. InfraVia, Liberty Global and Telefónica) for £2bn. But rival bidder CityFibre may yet raise a competition complaint.
At present Virgin Media (O2), which is controlled by Telefónica UK and Liberty Global as part of a 50:50 Joint Venture (JV), operates a gigabit-capable fixed line broadband network that covers over 16 million UK premises (mostly in urban areas). The network itself reflects a mix of hybrid fibre coax (HFC) and full fibre (FTTP) connections, although they’re aiming to upgrade all of that to full fibre (costing c.£100 per premises).
In addition, Telefónica UK, Liberty Global and InfraVia Capital also jointly own the semi-separate nexfibre business, which has rolled out an open access (wholesale) full fibre network to 2.5 million premises in areas NOT currently served by Virgin Media’s own network. But at the time of writing, the only two retail ISPs selling services via nexfibre all share some of the same parentage (Virgin Media and giffgaff).
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As previously reported on these pages, VMO2’s parent – Liberty Global – and CityFibre have spent the past few months battling over a major network consolidation deal to acquire Netomnia / Substantial Group (here and here), which could have a notable impact upon the competitive landscape. The big news today is that InfraVia, Liberty Global and Telefónica have won the competition.
Netomnia is expected to have more than 3.4 million FTTP premises and over 500,000 customers by deal completion. The acquisition will be made through the parties’ joint venture company, nexfibre, and will unlock £3.5 billion of investment in the UK market (this figure reflects the projected nexfibre capex spend between 2026-2040 as a result of the transaction).
Joint statement – Vincent Levita, Founder & CEO of InfraVia Capital Partners, Mike Fries, Chairman & CEO of Liberty Global, and Marc Murtra, Chairman & CEO of Telefónica, said:
“By bringing our strengths together, we are creating a scaled and financially secure wholesale fibre challenger to BT Openreach – one that will enhance competition, strengthen the UK’s digital infrastructure and deliver greater choice and quality for consumers and businesses.
This transaction unlocks £3.5 billion in international investment and reflects our shared confidence in the UK as a highly attractive market for long‑term investment, supported by the government’s economic policies. We are committed to accelerating full‑fibre coverage and helping ensure the UK remains competitive and ready for the future.”
Jeremy Chelot, Group CEO of Substantial Group, said:
“This landmark transaction with nexfibre represents the natural evolution of the UK’s fibre market. Consolidation has been inevitable, and this deal creates the scaled, sustainable platform needed to drive genuine wholesale competition. Importantly, our retail brand, YouFibre, will remain post-close, ensuring our customers continue to receive the same trusted service they know today, while benefiting from the financial strength and infrastructure scale this combination delivers. This is about building a stronger future for UK fibre.”
As part of the deal, nexfibre will sell Substantial Group’s retail ISP businesses, including the YouFibre and Brsk brands, to VMO2 for £150m “ensuring customers continue to receive the same trusted service they know today“. In addition, nexfibre said they will finance the FTTP upgrade of the 2.1m VMO2 Hybrid Fibre Coax (HFC) homes (i.e. those that are adjacent to the Netomnia footprint) with VMO2 paying wholesale fibre access fees on its customers in those homes as the fibre becomes available (with the “majority expected to be ready by the end of 2027“).
In exchange for the wholesale traffic commitment on the 4.6 million premises, VMO2 stands to receive 1) c.£1.1bn in cash, and 2) an indirect 15% stake in nexfibre. The vast majority of the proceeds will be available for deleveraging and the £150m to finance the purchase of Substantial Group’s 500,000 customer base. VMO2 will also provide a full suite of managed services to nexfibre – including construction – in return for ongoing management and construction fees.
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On the surface, such a deal would appear to be of debateable merit. Netomnia’s fibre has already overbuilt a good chunk of Virgin Media’s existing network, although there’s only a smaller overlap with nexfibre’s FTTP. VMO2/nexfibre would thus gain some additional FTTP coverage through the deal (overall coverage gain of over 0.5 million premises) and a nice boost in customer numbers, but whether that’s enough to justify the price tag is another question. The faster FTTP upgrade path for some HFC areas is a benefit too, but it’s not like VMO2 were spending much on those in the first place (see earlier figure).
However, the buyers also gain by removing a rapidly rising competitive player in the alternative network space, which at the same time prevents the market’s largest altnet – CityFibre – from securing its own merger with the Netomnia and thus growing the scale it needs to properly compete; this alone could be seen as a win for VMO2, albeit a potentially expensive one.
On the flip side, a sizeable portion of Netomnia’s customer base will have chosen them for their faster speeds, lower pricing and to escape from legacy incumbents like Virgin Media O2 and their cycle of inflation busting mid-contract price hikes. Suffice to say that most of the feedback we’ve seen from earlier reports suggests that many subscribers will be deeply unhappy with VMO2 gaining control.
On this point it’s positive that the YouFibre brand and its current services are to be maintained (seemingly adopting a similar approach to giffgaff), although over time we can’t help but wonder how their service and prices may change (i.e. will VMO2 be able to resist importing their old habits to the same base). A question mark also remains over the impact upon Netomnia’s pool of third-party ISPs at wholesale (e.g. Aquiss).
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For consumers, a deal between Netomnia and CityFibre is likely to have been much more palatable, which is due to the limited level of network overbuild and their shared position as lower cost broadband disruptors; this would have made for a more competitive market. But in the end, CityFibre simply struggled to deliver the most attractive offer.
The big question now is over how the Competition and Markets Authority (CMA) may view the deal, although we suspect they’d be unlikely to view VMO2 and nexfibre as being completely separate. The CMA is thus likely to consider the wider competitive ramifications of such a major operator buying into control of the altnet space like this, and our sources suggest that CityFibre are prepared to raise a competition complaint.
However, given the CMA’s recent flexibility toward big telecoms mergers (e.g. Three UK and Vodafone), it’s reasonable to expect that they may still allow the deal to go through – possibly with some concessions. Quite what form those concessions, if they do indeed materialise, may take is as yet unclear. But we wouldn’t be surprised if it included stricter wholesale requirements for Virgin Media’s consumer focused broadband network, which is something the operator has already been trying to develop (here).
Completion of the transaction is subject to customary regulatory approvals and is expected by Q3 2026. But after that will come the long, costly and complex process of network integration work.
UPDATE 2:13pm
CityFibre’s boss has responded to the deal.
Simon Holden, CEO of CityFibre, said:
“There’s an 80 percent overlap between these two players and, if the deal goes ahead, it would significantly reduce competition and the choice available to consumers, as well as force hundreds of thousands of Netomnia customers back to VMO2. Given the scale of this overlap, the CMA must thoroughly examine the deal.
Competition has driven lower prices, faster speeds and better services and this deal risks re-establishing an ineffective duopoly of BT and VMO2 and undermining the significant progress the UK has made.”
UPDATE 19th Feb 2026 @ 7am
The Government has also welcomed the deal, which could be a key consideration for those hoping the CMA might yet throw a spanner in the works.
Lord Stockwood, UK Minister for Investment, said:
“With digital and tech central to our Modern Industrial Strategy, this major investment is a clear vote of confidence in the UK’s world‑class digital infrastructure, supporting thousands of jobs and putting more money in people’s pockets.
This announcement will help deliver real benefits across the UK, creating new fibre networks and connection points for up to two million premises, and strengthening the UK’s position as a thriving business hub.”
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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Have to feel they’re paying to take a competitor out the market rather than because they see the network as being valued at that number – that’s a lot of money per premise passed.
Maybe there will be some pressure for VM to be forced to wholesale now, I’m sure the regulators are all over it.
This transaction allows the investment program to be refocused, so there are savings to be had.
This is exactly what they doing, its considerably more spend than just rolling out FTTP to same areas.
They killing of both CityFibre and Netomnia in these areas as VM’s interest was born when they learnt of CityFibre and Netomnia talks.
Sadly, what you say is true.
Well I thought this to, but after looking into, you find that the assets being handed across are not only network, but fully operational business with existing contracts, customers, employees with training etc.
So when you take the base unit cost to build to each premise and add in all the overheads of setting up the business, acquiring the customers etc. it adds up.
In terms of why they’re doing it, yes there is a win that they eliminate competition, but they grow their full fibre footprint by almost 3 million within 6 months and adds 500k to their customer base. It’s not feasible that they can make that growth in one year unless they make significant investments like BT has done and even then to begin producing that output of build takes a lot more time. The in the end they’ll have an overlap with more than one competitor which means return on that level of investment will be at risk.
So realistically when you look at it from that perspective VMO2 is making a smart move and the fact they’re doing via Nexfibre shows their intent is to operate a wholesale business with VMO2 being a consumer of that that wholesale network same set up as BT.
I agree thou OFCOM and CMA will need to ensure checks are in place for Nexfibre to ensure there is separation from VMO2 the same way as it done with BT.
@ greggles:
Netomina has been one of the targets for a good long time. There are clear indications of this.
‘This transaction allows the investment program to be refocused, so there are savings to be had.’
If you’d provide a source or at least a rationale for that it’d be appreciated. The alternative is that you have no idea what you’re talking about with regards to Nexfibre’s funding caveats and I’ve no doubt that isn’t the case.
@Polish Poler:
The evidence is in the numbers provided if you care to do the analysis.
Once again, you have resorted to a personal attack, demonstrating an inflated opinion of yourself and contempt for someone else posting in the comments section here.
I suggest instead that you take a look in the mirror, given that many of your comments are based on ego rather than fact, while demonstrating both a superficial grasp of the considerations and a shallowness of analysis.
So that’s why the brsk fellas are making people redundant – to save their own skin when virgin have to look at resource
This is normal, BRSK and Youfibre merged and you’ll end up with losses because they’re not going to end up with multiple HR, multiple IT, multiple support functions etc. etc.
Any redundancies at Brsk would have arisen from the acquisition by Netomnia.
Changes in resourcing associated with this transaction will come later.
ironically i’ve seen more netomnia staff getting the redundant boot than brsk staff
@anon:
Was Notomnia not the bigger of the two businesses?
NOOOOOOOOOOOOOOOOOOOOO 🙁
RIP Netomnia and YouFibre. That means I won’t be moving to their network because a) they have never rolled out to us and b) I want nothing to do with Virgin Media. Looks like I’ll staying with BT for the foreseeable future.
Are there much difference between Virgin and BT? When I was with BT many years ago, their
customer service was awful, I felt like I wanted to tear my hair out.
The problem with BT and Virgin is that they are not just broadband providers, they want to do everything else.
If you can’t beat them, buy them.
I wonder how many Netomnia end users will scatter at this news. One thing that is certain, consumer price rises are coming as you don’t spend £2Bil to without a plan to recoup it.
I am a YouFibre customer and recently their support has been terrible. I used to be a VM02 customer and moved to start fresh with what I thought was a new and exciting ISP. I am gutted this is going ahead and I have already asked how long I have left with my contract so I can move elsewhere.
Well done, this is a good move.
This development also lends support to the case for deregulating Openreach and BT in the forthcoming Ofcom regulatory period..
Indeed, which is why it’s interesting to see BT’s share price down 4.50 today. I would’ve thought it might have had a more positive affect.
@ed, oh no, BTIvor must be upset about that the other BT shareholders fanboys on here.
@ed:
There are growing concerns about BT leadership. BT needs to cut the “old-school” ties, move beyond cosy relationships with Whitehall, and take the fight to Ofcom. The current leadership seems to be indifferent to the threats and the investors are concerned about this. This, together with the agreement on the Netomnia acquisition, is of concern to the markets.
@ Ad47uk:
There is no need to be offensive. If you have an opinion, try expressing it.
Well, “the evidence is in the numbers provided if you care to do the analysis” what a nasty reply. It is simply buying up competitors.
“In addition, nexfibre said they will finance the FTTP upgrade of the 2.1m VMO2 Hybrid Fibre Coax (HFC) homes (i.e. those that are adjacent to the Netomnia footprint)”. So in effect Nexfibre will become the wholesale provider for the whole network once it has been upgraded to FTTP and VMO2 will be the retail ISP. Pretty much what I suggested may happen when this story first surfaced a couple of weeks ago.
so does this mean Nexfibre will ofefr 5gbps and 8gbps as what youfibre are offering?
I assume then this network will be wholesale or will youfibre become VMO2?
interesting times ahead.
I didn’t really understand that statement. Do they mean that in areas where Netomnia is available when an upgrade from HFC to fibre is ordered it will be handled by Nexfibre rather than VM directly? Maybe I’m confused by the word adjacent.
There is zero chance VM will continue to pay Physical Infrastructure Access rents to Openreach over the longer term. Most likely scenario is VM stop all investment in the Netomnia network as they continue to quietly upgrade their existing HFC network in their own ducts to full fibre. Once complete they’ll abandon the Netomnia network completely and write it off against tax.
This purchase isn’t about the Netomnia’s network, that has very little commercial value to VM as they already have one serving the same areas – it’s an unethical anti-consumer move to block fair competition.
I’d agree Ezra.
Once the fibre spine is ready for XGS via VM ducts it will be a simple case of fibre to the old VM point and then run fibre from the VM point to the Netomnia splice box. Job done. No internal work needed.
For RFoG it would be even simpler, just splice between the two existing splice points job done.
Then abandon the Netomnia PIA network.
@ Ezra:
That is not going to happen. Virgin Media O2 will not own the new combined infrastructure provider for a start, though it will end up with a minority shareholding.
@No name:
VMO2 will reduce investment in its own heritage network, with parts effectively abandoned as connections are transferred to the Nexfibre/Notomina provider. Project Mercury will be refocused on the rump – if this has not already been done in anticipation of the deal – resulting in savings to the investment budget.
Jeremy,
You have repeatedly positioned yourself as a champion of pro-competitive consolidation in the UK broadband market. At Connected Britain 2025 and elsewhere, you spoke about building scale in a way that would increase infrastructure competition and deliver tangible benefits for customers. You framed Netomnia as part of the solution – not part of the problem.
This transaction with Virgin Media O2 directly contradicts that narrative.
Instead of strengthening independent network competition, it consolidates further market power into one of the UK’s largest operators. That reduces long-term infrastructure choice in the very areas where Netomnia was presented as a competitive alternative.
For years, you argued consolidation must serve customers and protect competitive tension. This deal weakens that.
You spoke about doing consolidation differently. This looks like conventional absorption by an incumbent.
So the question is simple: were those previous statements about protecting competition conditional on remaining independent, or were they strategic positioning ahead of an exit?
Because from where many of us in the industry stand, this outcome appears fundamentally at odds with the principles you publicly championed.
Do you think he actually cares when he’s 30 million quid up?
It’s because he’s full of it, and Money.
He’s said whatever he need to to get that paper, and becomes irrelevant in the process.
I called it years ago.
£££ talks
Perhaps your issue here is believing that Jeremy Chelot owned the entirety of Substantial / Netomnia / YouFibre / Brsk, and as such had final say in any of this.
From VMO2s announcement of this deal:
“InfraVia, Liberty Global (NASDAQ: LBTYA, LBTYB, and LBTYK) and Telefónica (TEF) have announced an agreement to acquire Substantial Group. Founded in 2019, Substantial Group, OWNED BY investors Advencap, DigitalBridge and Soho Square Capital”
Jeremy is not mentioned here and I cannot see him listed as a Director of any of these businesses.
When ISPreview published on this story a few weeks back people again called out Jeremy for selling out and it was rightly pointed out then that he would not be the decision maker in all of this and Netomnia was not a charity!!!
So he can have his principled view on how things should play out; doesn’t meant the money men need to agree!
@Anonymous12345 – This is completely untrue. He is listed as a Director of Substantial and former direction of all the other companies you mentioned. Just search his name on company house. It was absolutely his decision to sell to VM02.
All CEOs are the same, they tell porkies and line their pockets with cash. Did you really think it was any different here?
Of course CallItOut would turn down generational wealth so their fellow citizens could get cheaper broadband
Turns out that (just like the founders of BrewDog, for example), anyone in business is in it for the money? Who could’ve guessed.
I didn’t think I would need to explain it but Jeremy Chelot is not a Director or owner of:
Advencap
DigitalBridge
Soho Square Capital
and as stated they are the Owners of Substantial – check companies house a “Persons with Significant Control.” Those with Significant Control will make the decision!
Notomnia: can’t feel good still being bitter that Netomnia didn’t cover your part of your area after all this time.
CallItOut: the company Jeremy is a director of that you’re referring to is Substantial Topco.
05 Oct 2021 Cessation of Jeremy Chelot as a person with significant control on 4 June 2021
The same Substantial Topco with that entry in their filings.
He resigned as director of everything bar Topco last year. He’s not had significant control of Topco since 2021. His share was heavily diluted by equity investments.
Significant control is 25% of the *voting rights*. How exactly he decided what the company did when as of 2021 he owned less than a quarter of the voting rights and it’s been diluted significantly further since is beyond me.
Please do check my homework on Companies House.
As far as how desperate he was to sell he was still raising capital to run it independently as of just weeks ago. He was ready to keep operating it as necessary but, regardless, not up to him.
Think both you and Notomnia are mistaken.
@Anonymous12345:
Quite correct.
I would also add that since those promises were made, we have had a change of government, with associated changes to government policy. These policy changes have all heaped extra costs on businesses to the extent that broadband sector progress is now down to a handful of players.
It is always unwise to be making openended promises in business involving matters beyond your control. All similar promises made by players in the sector are also likely worthless and it is only a matter of time until that is demonstrated to be true.
So there is no point in anyone getting bitter about these developments; these are the consequences of events beyond the business sector’s control. Anyone critical of these businesses doing what they have to might want to reflect on how they voted at the last election.
@CallItOut2:
He is one director. There will have been multiple teams involved in this decision across businesses, banks, fund managers and continents.
If you are bitter about this outcome, I think your anger should instead be directed at those who voted the current government into power because it is they who are crushing businesses with their hallucinatory concepts of how the economy functions.
AI reply.
The staff can’t seem to take a break, all the redundancy survivors from the past few months will have to go through redundancy again
I guess all those 8 gig services (plus the couple of people with 50GPON) didn’t pay the bills in the end.
“our retail brand, YouFibre, will remain post-close, ensuring our customers continue to receive the same trusted service they know today, ”
Didn’t people on this website’s forum note that their “support” teams were using some form of generative AI? In that regard perhaps a VM takeover is an improvement!
As I said on the last article. I wonder if the CMA will finally take notice of the rather incestuous relationship between VMO2 and Nexfibre, noting the supposed overlap between VMO2 and NO, and acting accordingly. I’m surprised the shareholders are happy to spend so much on a firm that has reportedly made liberal use of Openreach PIA.
I agree with the above commenter in that this gives Openreach even more reason to seek further deregulation.
Just seen your point about that youfibre will remain.
considering Nexfibre only carries VM02 and Telefonica’s budget brand giffgaff, I suspect those users will migrate over – can’t see VM doing all that work for youfibre customers to stay put…
It wont expand the footprint or customer count that much as is 80% overlap, the spend was to kill off competition from Netomnia (CityFibre if merged).
This very anti competitive behaviour strengthens the argument for regulation, the outcome I would like is for CMA to block the deal, and then start regulating VM in line with Openreach.
Not sure how deregulating Openreach helps the consumer.
Im with BT Ivor on this one.
It’s time to force open that VM infrastructure and Nexfibre to wholesale not pseudo wholesale should this deal proceed.
If only BT launched symmetric at a sensible price too, then I’d be all in.
@ greggles:
There is negligible overlap between the Nexfibre and Netomnia networks.
Where there is overlap with the heritage Virgin Media network, those customers will be migrated via a wholesale agreement to the NewCo network and the relevant parts of the heritage network decommissioned.
CityFibre aquiring them made more sense, but didn’t have the liquid assets necessary to do it.
Still, £2bn is a wild number. I suspect that’s a massive over-valuation, but then, Virgin aren’t aquiring them for the assets, but to take a piece off the board.
Any Netomnia customers planning to jump ship first chance they get?
When they contract runs out on Brsk yes – I still have FTTP thank goodness but it’s easy to re activate anyway
VM02 nexfibre etc dont really want netomnia… but they dont want anyone else having it either ! thats the issue…
I’ll be gone but unfortunately not until January 2027, unless of course I move house to an unserviced area.
I am going from 3 services (BT, VM and Netnomia) back to the incumbent 2 so we’ll see where the land lays but if I’m able to keep symmetric speeds as reasonable prices I’ll stay as the other choice is well worse for more.
Virgin Media benefits from the InfraVia/Liberty Global/Telefonica/ purchase because the wholesale agreement accelerates the transition of VM customers to full fibre while also allowing it to cut its investment budget for the conversion of the rump of the heritage network.
@The real insider:
That is not true.
I do not think the CityFibre offer was a flyer.
I do not know what will happen with CityFibre. It plans to expand its footprint and customers via acquisition (it recently announced the layoff of about a third of its workforce due to this change of direction). It has an acquisition fund to support this, but I think the Netomnia deal was a bit too ambitious.
Bye bye YF..I will be off at the end of my current contract. What a shame
While I’m sure they’ll miss a customer who blames them for issues with his own equipment and escalates into the sky every minor glitch they’ll probably manage.
Good luck with your new provider.
Now it’s time for the corrupt CMA to let us all down once again. Absolute joke of a “regulator” only thing they regulate is how much money is put into their pockets by these greedy businesses. I have zero faith they’ll stop this merger.
If they didn’t stop the 3/Vodafone merger I would have thought they would be much less likely to stop this one. 3/Vodafone was of national significance, Netomnia has covered about 10% of the country.
Any evidence of this supposed corruption?
I’m sure the CMA will take exception to that comment.
@Mark
It would definitely count as a significant reduction in competition in the areas in which these two companies operate but not very significant nationally because Netomnia has a tiny market share. It’ll be interesting to see what view the CMA take on it. I always thought market power in this type of industry should be judged at a more local level.
This deal would not have gone ahead if there were any significant risk of the CMA blocking it. There may be some remedies, but they have probably been anticipated.
The claims about overlap hold little water, given the details of the proposed deals. VMO2 and Nexfibre must also be allowed tocompete in the market just like any other of the players.
So disappointed.
For years VM was the only option at my address as OR are stuck on very long FTTC lines delivering rubbish speeds.
VM don’t care, price it how they like, take the network down for hours on end because they need to do maintenance. They’ve been a nightmare and always will be.
Netomnia came along and it was a god send.
OR FTTP still isn’t available so my address is going back to being VM only. Amazing. High prices, rubbish CS and unreliable Broadband.
Would be a very wise move for customers of Netomnia /Youfibreto to extricate themselves from their present contracts as soon as is reasonably practical!
Would be a very wise move for customers of Netomnia /Youfibre to extricate themselves from their present contracts as soon as is reasonably practical!
Yup 100%
Why? Wouldn’t it make more sense to enjoy the same service while it lasts and seek to leave if/when it changes?
Maybe I’m mistaken but basing behaviour on reality not some vibe of impending doom seems wise, especially when we’re talking contractual obligations.
If the service changes and I don’t like it I’ll leave. I couldn’t care less who owns the holding company if the product remains the same. It changes I can change.
Am I the only one working in telco that sees this as a marginal positive? I’ve seen in other countries that at wholesale, less is more, but never any less than three incumbents for bigger countries or two for smaller ones. A regulatory model of stricter wholesale regulation but less at retail level seems to create success.
Too many alt nets are faltering under the excess construction costs. Whilst mergers may mean slower rollouts in 10-15% of the country, it will give greater certainty that those 10-15% will actually get a better network.
Sorry if you disagree but take a look around Europe as I think you’ll see I’m on to something.
What we should have had is a fibre network country wide, run by a non-profit-making company, or government owned, sadly it did not happen and that is why we have what we have now.
A miss match of different companies, all digging the roads up to lay their own fibre. Can you imagine if we did that with Gas, Water and electric?
@ Ad47uk:
Nationalisation is never the answer.
The EU is in the process of redrawing its regulation (currently set at four major participants in the larger markets) of the market as it comes under pressure from operators and providers to allow larger-scale mergers across the EU.
Unfortunately in our part of west midlands, this now leaves us with either Virgin Media, Openreach ASDL and or 5G Home broadband (which is good in places as speeds top out at 1200 Mbs).
Many a times the area were earmarked for fibre deployment, by OR, but it never happened.
BRSK were the competition around here, hopefully the CMA object or if there is enough concerns raised on the lack of competition in areas where there is significant overlap – that VM will have to either run this as a wholesale network, or sell it to a competitor.
Who cares? It’s VM will rot it in hell.
Thank you for that erudite, well argued and balanced comment, Phil.
Never thought I’d see the day when I’m about to be screwed by a Virgin.
Question now is will CityFibre be able to acquire enough of the other altnets to achieve the scale it will need to stay independent. Both Netomnia & CF have large amounts of overbuild with VMO2 and Rajiv Datta is on record as saying he doesn’t think more than 2 networks is viable. CF’s latest round of funding only lasts until next year & will the investors be willing to pump more cash in with Netomnia removed from the field? I could be wrong but I can’t see VMO2 coughing up for CF like they have just done with Netomnia, their aim may well be just to squeeze them out.
Didn’t someone say that it’ll all end in tears?
I am not sure CityFibre will remain independent in the long run, nor that its independence is at the heart of its backers’ ambitions.
The business still has an intact acquisition fund, so the pressure is on to improve those returns on the investment already made in the business.
Redundancies and price increases on the way, with non-existent support. Glad I left them ten years ago.
Yes but at least the connections should be better, Not that that’s enough
You left a company before it existed? Fine work.
So pretty much as predicted. CityFibre’s call for the CMA to thoroughly examine the deal seems fair.
https://www.linkedin.com/posts/asayle_the-merger-of-freedom-fibre-and-truespeed-activity-7427763021944545282-yxFn
If they didn’t stop 3/Vodafone…
There is little merit to the CityFibre claims and it emphasises a number that is not relevant to the details of the deals involved.
Grim. I’m out. Not going to be a VM customer again, I left VM for Youfibre, not going back ever.
@Grim your exactly right…Virgin were a nightmare to leave ( Hotel California comes to mind) would never go back again……would rather be off the internet!
I thought the same but if this happens I don’t fancy FTTC speed where I live. At the moment I can use Netomania or VM FTTP, wouldn’t want to be back with VM but can’t imagine them letting me use the Netomania infrastructure when their Fibres are also fed to our house.
How will the employees gain if they are shareholders of Netomnia, am I a good leaver if I have just been made redundant
You will need to review the terms of the investment agreement you signed or possibly the articles of the company
The business announced to all staff today that their shares were worth nothing.
Surely they will now reach a point of significant market share and have to join OR on the regulation step? Be interesting to see how they respond to USO requests. Will that be a competitive pricing with OR, and hence liwe cost?
VMO2 will not own the new merged business outright; it will only have a minority holding. So, on what grounds can Ofcom impose additional regulations on VMO2?
The correct approach would be for Ofcom to recognise that its regulatory regime is no longer relevant to the current market nor to what the market will be in five years’ time.
Far2329Light,
You’re writing like some business analyst seeing the future, discussing various details, intricacies, awesome.
Then you write this:
‘VMO2 will not own the new merged business outright; it will only have a minority holding.’
VMO2 is 50:50 Liberty Global and Telefonica. Nexfibre is 1/3rd each Liberty Global, Telefonica and InfraVia.
I can’t claim to be a business or financial expert, I’m a technician, however if the two companies that own VMO2 each own a third of Nexfibre even with the dilution of the 15% being paid for Substantial they are still in control. Each third gets diluted, the 66.666% VMO2 parents own doesn’t see a 15% reduction while InfraVia keep exactly a third. 15% additional stock is not enough to dilute Liberty and Telefonica below 50% of voting rights.
66.67 / 1.15 = <0.5.
You heard it here first.
Not exact but you get the idea.
@Polish Poler:
Read your own comments. VMO2 will not be the owner of the NewCo Nexfibre/Netomnia network provider; it will be a minority shareholder.
@Polish Poler:
Thank you, but I have been aware that you are a “technician” for some time. You are clearly competent within your domain, but you also make mistakes in your comments while suffering from a surfeit of both ego and contempt forothers.
I think you will find that you are compounding two separate transactions without access to the full details.
VMO2 will not own NewCo. It is instead procuring a wholesale deal with NewCo while providing contractual resources and services to NewCo. VMO2 will end up owning a smaller network as a consequence of the deals.
There may be a provision for Ofcom to intervene and apply specific regulatory terms, either for scale and/or for pricing of the various services offered between the two entities. If so, there are various customer relationships with CityFibre and Openreach, which will provide a model for how this should work.
Ofcom regulates the UK players, not the ultimate owners. It might decide that this is a gap in its regulatory powers, but that decision alone would also have a detrimental impact on the sector.
So ultimately, the least worst option now is for Ofcom to cut regulatory controls and let market forces encourage the major players to fight it out.
@Polish Poler:
-> “66.67 / 1.15 = <0.5."
Were you in the same maths class as Rachel Reeves?
The maths was fine, the input wasn’t.
As I said on another comment:
‘Yes. I was wrong about the ownership structure. You were right, I was not. My error, apologies.’
A reminder, kids, not to post late at night after drinks. You can make a total tool of yourself as I did. Don’t be a me.
You’re also correct on the tone I used. Unacceptable and rude. Sorry.
Looks like madness to me. Too much money, too much overlap and eye off the ball whilst bogged down in regulation, restructuring and redundancies for the next year or two.
Big blow for CityFibre though which is already pretty much on life support.
Look closer at the details. It will not seem like a big amount then.
Very disappointing news to hear, bit lost for words really.
Prices will go up if all goes through you can be sure of that!
Does anyone have an Alt Net they can recommend for people situated Manchester once Brisk Energies. I already have a Business Connection with Virgin so I doubt they’ll offer a second line in once the merger completes.
I wonder if there is a claim to revisit or delay Ofcom’s final statement on the FMR?
You would hope that Ofcom will have anticipated this deal and thus made provision to cut swaths of regulation, but bureaucrats don’t like putting themselves out ofbusiness.
Good grief.
Nothing quite inspires cutting red tape and bureaucracy like a substantial reduction in competition. Clearly time to go all in on the free market after that.
Seriously?
@Polish Poler:
On the contrary, these deals, if they go to completion, will increase the level of competition in the sector. All the major players recognise this.
It’s raising major concerns within the largest independent altnet. Major, major concerns. Expect stalling tactics while they try and scale and, again, retrench.
so virgin and brsk have overbuilt (brsk fibre in openreach ducting and poles)
brsk first full fibre, openreach suddenly a month later went full fibre, and eventually virgin went full fibre installing their small cabinets in the area.
guess we’d be migrated, so they don’t have to pay for openreach duct access.
dad won’t want them to put fibre through the garden.
Okay then dad best not order it?
Youfibre was rolling out in our surrounding area where Nexfibre had all already covered i suppose all this will come to a stop now to stop over build, i thought my parents would finally get fibre as FullFibre limited and nexfibre did not reach there road but guess youfibre will cancel this too
I hope people leaves now out of spite, I sure will be. Back to an Openreach based supplier for you!
Whatever makes you happy, James. I have better things to do than spend time on spite but you do you.
Definitely not renewing my contract with them. I’m never doing business with VM ever again. What a shame, they had something really good in the making.
Screw VM.
So that’s 3 contracts in family that won’t be renewing with YouFibre then.
Contract is with YouFibre not VMO2 and can’t see YouFibre lasting long after takeover. VM dont offer proper static IP on residential either so that’s a major degradation to CGNAT or even Dynamic. VM and Nexfibre dont do native IPV6 either. Also no in contract price increases and you can use your own router not some sh***y hub5x that does not have a modem mode (awaiting this as Giffgaff on Nexfibre uses ONT)
From sounds of others looks like a lot of cancellations going on and people having to go to BT unless they have another Altnet just to avoid VM like the plague it is.
Gutted
Left VM a few years ago to youfibre and loved it if the regulators allow this to go thru I will be moving again I don’t like VM I don’t trust VM to not meddle in youfibre so will be looking at other companies once my contract is up
Me too. With no open reach providing FTTP broadband where I live this is monopolising, not increasing competition.
I’m one of those that has no choice. OR FTTC at the most extreme distance from the exchange, VM hfc so jumped ship to YouFibre the second they were taking orders. 2gb symmetrical means I can work well from home. No unscheduled trips into the office because the network has been down. So I’m screwed really. We are on plan for or fttc this year. Hopefully this makes or/ bt confirm plans to serve these areas, but I will miss my 2g symmetrical, fixed ip etc no price rises (wel that won’t hold out) and own equipment for 39.99!
A sad day in Gotham City!
Suppose, I’ll be changing my login in six months or so!
Wonder what bits of the network they will keep? What about the fanfare about them (Netomnia) taking 40gb ports in London and Manchester. Don’t fancy bing moved onto VM/Liberty/Telephonica backbone. Bye bye 6ms ping!
“The Government has also welcomed the deal, which could be a key consideration for those hoping the CMA might yet throw a spanner in the works”. The government can’t be completely oblivious to the financial pressures on the altnets right now. They might not like it but reality bites.
I am not aware of the Government or any agency having said anything regarding this transaction. What is your source?
The update that was posted by Mark at 7.00AM on the 19th?
@Big Dave:
Ahh! Sorry Imissed that update. I had been searching the press for an official announcement.
This is pure game theory from Telefonica and Liberty. Take out the competition – despite the network overlap – and with it the obvious path for CF to scale up to 8m homes and beyond.
Suspect CF shareholders are now wishing they hadn’t put more equity in last year as without M&A their business is not sustainable with 5bn of debt. Anticipate Telefonica and Liberty will be ready to swoop in for CF when the banks say enough is enough and back to the duopoly we go.
No it is not.
This is about building scale so that the business can survive.
As I have been commenting on this topic for many a year (https://shorturl.at/syLKo) the reduction in costs should be the number one priority for any service provider. To quote Chuck Berry (Teenage Wedding) “you never can tell.” How close are we the NAN, I wonder?
You keep posting links to this article, but it is a mishmash of ideas and of no relevance to the current market.
You keep making political arguments, giving your own opinion on this deal and think that paying for a transaction with 15% stock means the owners of 2/3rds of the entity prior to dilution somehow end up with less than 50%.
Not an expert but reasonably confident that it’s impossible to reduce 66.67% of stock below 50% by 15% of it changing hands and that of course isn’t what happened. Substantial have new shares they haven’t been given shares from the three Nexfibre partners. Other three’s stock diluted, Substantial get 15% of the post-dilution pool.
I’ve sparred with John somewhat and have many issues with his output but he seems to have a reasonable grasp of basic mathematics and no blind political bias requiring public sector to always be bad, private sector good.
How did you end up presenting that to the SCTE, John? Curious. Must be a story behind it that doesn’t require me to cancel my subs.
@Polish Poler:
You are fully confusing yourself on the matter.
P.S.
John has not made a political comment in his post.
Yes. I was wrong about the ownership structure. You were right, I was not. My error, apologies.
There’s a lot of VM hater’s on this thread but look at this way . You buy a altnet with has the ability to wholesale on that network why wouldn’t VMo2 do this and then do this for the rest of VMO2 network including the UPP part they bought hey some big players on this network and some of the small ones . The over build regions where VMO2 have HFC you can give the customers a choice . They are looking to replace the HFC network but it’s slow and they are not going to walk away and leave all their underground infrastructure to rot as this is what put the cable companies in debt in the late 90s .
Then you look at when VMO2 planned to wholesale and went as far as setting out the structure ready Telefonica, 50% owners, vetoed it.
Upgrading the HFC isn’t slow, it’s flying along. If that’s the business case you’re talking near a £ a day to get the full fibre there faster than planned and it’ll be lifted and shifted into VM ducts at some point.
Never a plan to leave the ducts to rot. Where do you think the fibre is going?
Oh dear, BRSK are about to build in my area and this is bad news for reasonably priced FTTP I was hoping for as VM are a complete shower.
I can see why those on Netomnia’s current retail ISP brands would be unhappy, as a former VMo2 customer, who ironically is now on Aquiss, I would really prefer to not have to use VMo2 as an ISP again. That said, one would hope the CMA will require Netomnia’s current retail ISPs be spun off and require open access be extended to the new Netomnia/Nexfiber/VMo2 FTTP network for all ISPs on the existing Netomnia network. One would hope if VMo2 have real competition on their own network it may force them to re-think their current practices as far as price-hikes and atrocious customer service. That said, BT hasn’t exactly massively improved even with competition on their network. I suspect the difference for VMo2 is their customers already moved from BT to VMo2 so may be more likely to move, this is of course an assumption and I have no data to back this up. Anyway, all of this is for the clouds until the CMA render their decision and the outcome of any complaint by CityFibre. But, given Whitehall seems to be, at least in the round, in favour of the merger (buy-out), it’s safe to say the hurdles are unlikely to be too onerous. But, fingers crossed I will have an option to take a connection with an ISP on a network that is faster than OpenReach without having to deal with VMo2’s “customer service”
Netomnia will be selling its ISP customers as a result of these deals.
Netomnia is already a wholesale provider. Nexfibre was being moved in that direction. The NewCo will be providing wholesale services, but will also be independent of VMO2.
The long promised mobile Network from Youfibre that was always just around the corner, don’t think it would have been with the O2 Network had they remained independent.
I’ve just sent a formal concern to the CMA about this. If you’re like me and moved to YouFibre specifically to escape the VMO2 ‘retentions game’ and technical restrictions, it’s worth 2 mins of your time to do the same.
The CMA needs to hear that this isn’t ‘market growth’—it’s a move that kills our only local alternative. I’ve flagged that we risk losing things like symmetrical speeds and the ability to use a direct ONT connection with our own kit (rather than being forced into VMO2’s restricted ‘Modem Mode’ ecosystem).
You can just email general.enquiries@cma.gov.uk with your postcode and explain why losing an independent Altnet harms your choice as a consumer. The more of us that flag the network overlap and the return to a duopoly, the more likely they are to investigate.
Thanks for supplying the CMA email.
I will act on your suggestion.
I probably wouldn’t have bothered without your info.
Block Virgin Media’s takeover of Netomnia/YouFibre
For far too long, my community and I were caught in a monopolistic chokehold by Virgin Media, the sole provider of FTTP broadband in our area. Our only option was to endure their exorbitant fees and less-than-reliable service because there was no alternative. It felt like being trapped, robbed of choice and quality.
However, salvation came in the form of Netomnia/YouFibre. They sparked hope by providing us with a much-needed alternative, even offering up to £300 to buy out our contracts if we switched to them. Unsurprisingly, a significant portion of our community embraced this opportunity to break free from Virgin Media’s stranglehold and opted for YouFibre’s more customer-friendly services.
But now, that hope is under threat. Virgin Media is planning a takeover of Netomnia/YouFibre, a move that would effectively crush competition and drag us back into a monopolistic nightmare. Without other options, many people will be forced to return to Virgin Media, and we’ll again be at their mercy, with higher prices and unstable service levels looming.
The Competition and Markets Authority (CMA) has the power to stop this before it’s too late. Blocking this acquisition is essential to preserving competition in our area and ensuring that services remain accessible and affordable for everyone. With alternatives like Netomnia/YouFibre, we can enjoy competitive pricing and reliable service, enabling better connectivity and choice.
The CMA must recognize the significant impact this takeover will have on consumers and the importance of maintaining a competitive market. Monopolies deprive communities of innovation, customer service excellence, and pricing fairness, all of which are attainable with multiple players in the market.
By signing this petition,
https://c.org/sdVRDqPq9z
you help send a clear message to the CMA: Protect competition, protect consumers, and block Virgin Media’s takeover of Netomnia/YouFibre. Stand with us to keep our broadband options open and fair. Please sign and share this petition widely.
Sign our petition now
Block Virgin Media’s takeover of Netomnia/YouFibre
https://c.org/sdVRDqPq9z
Many thanks Robert Ballard