Virgin Media O2 UK’s Owners Close in on £2bn Broadband Deal for Netomnia
European telecoms giants Telefónica and Liberty Global, the joint owners of Virgin Media and O2 in the UK, have reportedly now joined with private equity firm InfraVia Capital to progress their previously proposed £2bn bid to buy alternative full fibre broadband network Netomnia toward conclusion. The deal is likely to offer the altnet more than rival CityFibre could muster, but competition issues could be raised.
Just to recap. 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 3 million UK premises RFS (inc. 445,000 customers) – available across parts of 98 cities and towns. The group aims to cover 5m UK premises by the end of 2027 (inc. 1m customers by 2028).
By comparison, Virgin Media operates a gigabit-capable fixed line broadband network that covers over 16 million premises (mix of hybrid fibre coax and full fibre connections), although they’re aiming to upgrade all of that to full fibre (FTTP) by 2028.
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In addition, Telefónica, 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 are all part of the same parentage (Virgin Media and giffgaff).
Back in October 2025 reports emerged that VMO2’s parents and CityFibre appeared to be battling over a major network consolidation deal to acquire Netomnia (here). According to today’s FT (paywall) report, VMO2 now appears to be leading with the most attractive offer (CityFibre may be more constrained on this front) and is allegedly close to signing a deal, although none of the parties involved have officially commented on this.
On the surface such a deal would not appear to make much sense, since quite a bit of Netomnia’s fibre has already overbuilt the combined nexfibre and VMO2 footprint (over half of Virgin Media’s gigabit network is overlapped by Netomnia, albeit less so on the nexfibre side). But the move, if confirmed, would also remove a major competitive player in the alternative network space and will, crucially, prevent CityFibre from securing its own merger with the operator and thus growing the scale it needs; this alone could be seen as a win for VMO2, albeit a potentially expensive one.
On the flip side, customers of Netomnia’s network, many of which will have used them to escape from legacy incumbents like Virgin Media and their cycle of inflation busting mid-contract price hikes, will probably be less than pleased about such a transaction and the future impact it may have upon their services.
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Indeed, for consumers, a deal between Netomnia and CityFibre is likely to have been much more palatable. This due to the limited level of overbuild and shared position as lower cost broadband disruptors, which makes for a more competitive market. But if CityFibre can’t deliver the most attractive offer, then none of that matters.
The next big question mark remains over how the Competition and Markets Authority (CMA) would view such a deal, since it’s hard to imagine them treating the networks of Virgin Media and nexfibre as being truly separate, due to the shared parentage. The CMA is likely to consider the wider competitive ramifications of such a major operator buying into control of the altnet space like this, and you can bet CityFibre will raise a complaint.
This is all before we even consider the usual complexities and costs for VMO2/nexfibre when it comes to tackling any differences in network infrastructure, retail ISP relationships and technology. All of this could create issues for later network and customer base integration (e.g. what do they do about those areas of network overlap – discard them and migrate customers or discard their own network and migrate the other way).
However, it’s worth remembering that such deals 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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As it stands, the FT’s wording appears to suggest that a deal is now all but signed, but nothing’s done until it’s done and that’ll be down to Netomnia’s decision in the next few days or weeks. What they decide may have a noticeable impact upon the wider competitive landscape and force CityFibre to focus on different, and possibly less attractive, consolidation targets; growing the scale they need thus may become harder.
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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VM02 + Netomnia = big disaster for consumers.
It should not be allowed by the CMA……. should block it!
That’s annoying, we only just left VM last month to YouFibre.
If netomnia is successfully still growing etc why would they want to sell? A chance for investors to cash in now incase things get worse?
The current climate makes it very hard:
– companies going bankrupt, less confidence in the market
– interest rates going up, money less available
– new round of taxations really hit businesses hard
– again on taxes everyone saw what happened with the theft on energy companies and also some properties, no one wants to be the next “windfall” sector
– violent crimes up so very unsafe for engineers and sales
– car, fuel, parking and fines are also drastically up making the above more expensive
– most expensive electricity in the developed world
– further uncertainty about more taxes makes people leave the country
If again many competitors have thrown the towel, it is not a stretch to say that things have affected Netomnia too. Good on them for not selling for peanuts
Also it does not make sense to downgrade an xgspon customer to VMs old network, it’s obvious they will migrate the other way when available
I keep a backup line with Aquiss Business. Brsk is my current main connection and I am inthe process of being moved over to YF as the first Brsk-YF customer. Lucily they are not extending my contract (even though new customers are now 12 months and I am in month 13 of my 18)
But if this kicks in – forget it. I will stay on FTTP. I dislike Virgin and refuse the be their customer now when they could have cabled this street 15 years ago when it was all put up – instead they left us on ADSL until 2023!
We at this household escaped virgin media, which we were a customer of for 20 plus years, due to their pricing strategy and their customer service provision, to BRSK, only to be swallowed up by virgin media O2, if this is true, then I’m voting with my feet and moving, but to whom, as there is no open reach fibre here, starlink or 5G are the other other two options.
The other issue is that VM could have an have an expansive underground and an overground network, here, hopefully it’s not wombeling free, unless they plan to underground it all, as why pay openreach for pia usage, where they have own ducts, where there is a significant overbuild.
That being said, Where there is significant overlap between the two providers, the CMA should mandate open network access, and allow third party access.
Same here – on Brsk but not going to stay if this is the case.
I have a Starlink and even their £35 a month 100Mbps plan gives a solid 100 down and about 25 up. Their £55 service is 200/30 and their Max is around 450/50 – of course it all varies but generally it’s good and only going to get better
That’s crazy, I thought VMO2 would never go for it considering the overlap is like 70% or something. It will be interesting to see how CMA and OFCOM react considering they don’t view VMO2 as having a dominant position in the market will they object on the basis of the network overlap. It definitely doesn’t seem like a positive for the consumer as it removes in my opinion well built and managed alternative network. I see no mention of Youfibre, not surprising which means that would proceed as an independent ISP.
If Virgin Media really does buy out Netomnia, I would simply be forced into sticking with Openreach-based ISP’s, as I don’r want to go anywhere near Virgin Media owned assets. Only way I would is if Netomnia is kept as an independent company but as a parent to VM, but I doubt thats going to happen.
There goes all innovation in the ISP market then. Netomnia was the only major ISP offering actual full XGS-PON Speeds outside of B4RN.
I been waiting more than 4 years Youfibre, and when I can see light at the end of tunnel…
They finally connected wires in pole and now I can expect them any moment.
Week ago Youfibre told me that they was in talks, but nothing happened. But, he told that I can leave them if they decide to sell it. So, also, if they will sell it to Virgin, I’m gone.
I’m bit lucky, have OR FTTP and Cityfibre also building in town.
This is a big shake up for the altnet market. Will VmO2 use it to wholesale there Xgs pon network so others can use it . One of the problems altnets face is they over built each other so if you go after another altnet how much of the areas you acquire you already have your own footprint. . How many altnets use VMO2 to carry there backhaul traffic? . We read on constant basis the issues that the smaller altnets face so who will be next to merge get bought out
If I was one of Netomnia’s owners I would be looking for a cash buyout with it’s relatively low debt levels & it’s unfortunate that VMO2 is best placed to offer this. Both Netomnia & CityFibre seem to have large amounts of overbuild with VMO2 so a consolidation between the 2 would be the last thing VMO2 would want. You would hope that the CMA would step in but seeing as how pathetically useless all the regulators are in this country I’m not holding my breath.
Very disappointing if this goes through.
Doubtful if CF could match the combined clout of both Telefónica and Liberty Global though.
Hope it gets referred to the CMA, but I’m not holding my breath on that score.
They could. Easily. Their backers are Saudi Arabia (Mubadala) and GoldmanSachs, the biggest pockets in the world that even KKR couldn’t touch. But as always it depends on business plans and debt management.
Infravia are birdseed in front of these people.
the issue is that Virgin Media O2 have their own nexfibre system but that isn’t wholesale. (Giffgaff being O2 owned).
As for the overlap is that 70% overlap Nexfibre to Netomnia? or is it Virgin HFC to Netomnia? if it is the latter (And I suspect ti is), this will overnight push quite a chunk of users onto complete full fibre and accelerates their plan to remove HFC. The flipside is they will gain customers in non VM areas.
The issue that many face now is that knowing VM02, customers who are with BRSK/Youfibre may well be migrated.
Poor because on Nexfibre, theres no modem mode and no ont either (it’s in the SH5X), you have to use an ont on a stick (sfp module) which isn’t supported in any way (against TOC i think?).
Always knew Jeremy would sell out.
It’s business. Netomnia has numerous shareholders who probably see this is a an attractive opportunity to positively exit a very challenging market. Altnets are struggling and consolidation is the name of the game. Jeremy, to an extent, steers the ship but money talks.
Are you surprised? Its not a charity, got nothing to do with the individuals. They started a business, risked their capital and time. Why is it a surprise when founders sell out, they are good at starting business, they have a lot less interest in running an organisation longer term.
Zen is probably the only ‘exclusion’ to that rule. We all know Richard will never sell for reasons which are well known / published.
God sake there goes the gigabit provider that charges you a palatable price along with symmetrical speeds without the mid contract price hike!
Interesting. VMO2 will likely be able to buy one of either Netomnia or Community Fibre. For VM I’d have thought London would be a better market to own and capitalise on so my guess as a fit for them would have been Community Fibre, leaving City Fibre to get Netomnia. For City Fibre it’s pretty existential to buy either of these two if they want to realise their dream of being a serious wholesaler post 2030 with the following predicted market, once you include the retail side of strategic alignment as well:
Pillar 1: Openreach with 31 million premises and EE for bundling mobile with 10.5 million customers active; £3.1B revenue
Pillar 2: VMO2 with 23 million premises having bought Community Fibre and Virgin Media & O2 leading retail, 7.8million customers and estimated £4.2B revenue
Pillar 3: CityFibre + Netomnia with 12 million premises, VodafoneThree and Sky as primary retail with 9.2million customers and estimated £4.5B revenue
It goes to show why CityFibre bent over backwards to get Sky to resell their network and that their 8m build target is actually too low. However confusion reigns in that Vodafone have already partnered with Community Fibre leading to speculation that VMO2 will indeed get Netomnia and CityFibre gets Community Fibre (and finally de-ambiguate the abbreviation of ‘CF’ in the process).
Expect to see a lot of bundling mobile and broadband nearer 2030. But I also expect to see both Netomnia and Community Fibre sold in the next 18 months or so. By 2030 it’ll all be consolidated. Exciting times.
The fact that everyone in the comments is disappointed just shows how good and reputable netomnia are..
Hooray… Inflation busting annual price increases and crap CS…
The only thing I can think of is they are doing this to kill the competition, not expand their fibre coverage. If the overlap is 70%, they buy the FTTP network, which is in the OR/BT duct. So do they keep it where is it, and eventually abandon their own duct network, which is the most valuable asset. Or do they the move the Netomnia network into their own ducts? If they do that they may as well just build their own network.
Really doesn’t make any sense from a technical perspective, just seems they’ll buy want to kill the competition
This would be extremely disappointing. I have been happy with YouFibre/Netomnia but would be considerably less so if Virgin Media took over, they are poisonous and ruin everything they touch.