Liberty Global CEO says nexfibre and Virgin still committed to Netomnia UK broadband deal
The CEO of UK broadband provider Virgin Media’s (VMO2) co-parent operator Liberty Global, Michael Fries, has told investors that the group “remain committed” to trying to get nexfibre’s £2bn acquisition of rival full fibre network Netomnia over the line and “aren’t going to build any more fibre [FTTP] on the VMO2 balance sheet regardless of the outcome” with the CMA.
It’s fair to say that the Competition and Markets Authority (CMA) threw somewhat of a spanner into the works of Virgin Media and O2’s wider UK plans, as well as that of various other alternative networks (altnets), when they provisionally ruled to strongly reject the £2bn deal for Netomnia (Substantial Group) last month. Nexfibre continues to challenge that before a final ruling, but it currently appears to be an uphill battle.
The publication of yesterday’s Q3 2026 results only served to underline the fallout from all this, with VMO2 announcing approximately £800m of cost savings by 2029 (including a 30% reduction in their workforce) and their decision to “halt investment in further fibre upgrades” beyond its existing commitments (nexfibre’s expansion into new FTTP areas had already stopped early in 2026).
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The group also confirmed that they were exploring wholesale arrangements to support the expansion of its full fibre services into off-net areas not covered by VMO2 or nexfibre (Openreach are reportedly in the frame). Suffice to say that some will have read yesterday’s results as an indication that VMO2 may have given up on trying to get the Netomnia deal over the line with the CMA, but Michael Fries later told investors this was not the case.
Michael Fries, President, CEO & Chairman of the Board at Liberty Global, said:
“Importantly, the team is already redirecting CapEx to clearer, higher return projects, which has prompted the decision, by the way, saying it today that we aren’t going to build any more fibre on the VMO2 balance sheet regardless of the outcome on Netomnia. Instead, we see a big opportunity to upgrade nearly 70% of the HFC network to 2 Gig speeds next year. That will have a huge impact and give Lyssa a tremendous asset to start marketing.
…
Now regarding the Netomnia transaction, we remain committed to this deal. And we made a decision to keep our remarks today short and to the point. I’m sure you’ve seen our public statements and are fully aware of the debate. All I’ll say is that we are deeply disappointed by the CMA’s interim report. It is so fundamentally flawed with conclusions and counterfactuals that do not reflect the commercial and financial reality of the U.K. market.
In particular, the assumption that CityFibre, another operator, would have or will have acquired Netomnia is not a credible basis to judge our transaction. I think you’re well aware of CityFibre’s financial condition, nor is the assumption that the billions of pounds of investment enabled by this deal would simply happen anyway, as I’ve just indicated to you, we’re halting the fibre build on VMO2’s balance sheet.
So this is a big moment for the U.K. telecom sector, for sure. But I think it’s an even bigger moment for the UK. Investors are watching to see whether or not UK regulators are prepared to apply the law in a fair and reasonable manner, particularly one that does not pick winners or prop up failing bidders. So stay tuned it ain’t over.”
Later on Michael lamented that the situation was a “bit of a wake-up call” to the group, which he said “never did … anticipate that this transaction with Netomnia would encounter such fierce resistance” (neither did most of the industry). Mike added that it was now “unclear to us how this market evolves over the long term. And I’m certain that the powers that be in government have no idea how it’s going to unfold“.
Andrew Lee of Goldman Sachs followed this by querying whether the situation had made it more or less possible that Liberty Global could sell assets to help reduce their debt pile. In response Michael pointed to the “remaining tower portfolio that we have an interest in” (mobile masts etc.) and indicated, with respect to their HFC and FTTP broadband networks, that they were “looking at all sorts of opportunities here to raise cash … And so that’s on the table. We just can’t speak about it today.” As Michael oversees Liberty Global, then this could also be partly viewed as a reference to both their UK and European networks.
Finally, Lutz Schüler, CEO of VMO2, separately responded to a question over the future of their UK network and use of HFC, which delivered an interesting reply: “So the question now is, yes, for the next couple of years, we are safe with HFC. And then off-footprint, it’s a huge opportunity. And on-footprint, we might get on other networks or there are lots of inorganic opportunities still around the corner, and we will find a way to roll out FTTP with partners where there are [no more than] two existing fibre networks.”
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The above suggests that Virgin Media may recognise that their 2Gbps speed upgrade in HFC areas will only get them so far (FTTP can go a lot faster) and that their mooted plans for working with other FTTP networks could go beyond a focus on expanding coverage into areas they don’t yet cover. Time will tell.
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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“tremendous asset” – erm, creaking copper that has lots of faults would be better description.
2gbs won’t save them on HFC. The customers who go for those tiers expect higher upload than 100mbps, the same as for 1gbps.
Expect more customer loss as competition bites with full fibre. It’s a green light to say VM not investing in those HFC areas they havent converted, come on in other full fibre builders.
It also costs them more to maintain copper that’s been in the ground for decades and right now, utilisation may be back in areas if customers do order 2gbps. They aren’t running just DOCSIS 3.1 channels and running slower DOCSIS channels as well.
VMs 2Gb means they can complete with the OR 1.6Gb, and both have similar upload. OR won’t have XGS-PON rolled out for a while yet.
VM also have brand recognition that alt-nets can’t do, and can package mobile with broadband, an area alt-nets don’t tend to touch.
Unless symmetric fibre providers get better at demonstrating any a home might want a symmetric connection, most people will just look at downstream speeds. Most consumers confuse WiFi and broadband anyway and look for the shiny router.
Won’t keep me and rest of family already switched out.
Who wants the unreliability of copper if they can get fibre?
Anyway, as I say, let’s see what their churn rate next year is like as competition bites 🙂
Interesting that Liberty Global have said that they “aren’t going to build any more fibre FTTP on the VMO2 balance sheet regardless of the outcome” with the CMA.
With the speeds available over existing HFC networks – it makes sense for them to concentrate their investment on upgrading much of their HFC network to 2 Gig speeds.
Such a shame that we paused our VM02 HFC over IRS (TV) in 2023, having secured permission for them & upgraded over 100,000 homes for Virgin Media over existing coax TV (IRS) networks in MDU’s.
Indeed, three years later we continue to undertake about 350 new Virgin Media consumer connection per month, on the premises that we upgraded for them.
Maybe there will be an opportunity to breathe new life into HFC over IRS (TV) – especially since it was around 1/3 of the cost of a full fibre upgrade, and in many case they have network right outside & seemingly about to be upgraded to Gig2.
So mustang dead regardless (probabluy ok in areas where works started).
It looks like Ofcom’s fantasy of three networks across the U.K. is well and truly in the bin. So for all of the ‘juice in the system’ and the billions of pounds ploughed into U.K. fibre, the legacy is going to be an even stronger BT. What a mess.
Three networks was always a silly idea anyway. Virgin’s predecessors couldn’t make the economics work even though they had exclusive regional franchises, a technically superior network, and BT’s hands tied behind its back. What hopes did the altnets have in overbuilding VM and Openreach?
Openreach still faces ludicrously one-sided regulation but BT Group shareholders can be very pleased with how things are going.
As I said in the other thread, VM on Openreach makes a lot of sense to reach the rest of the country but it will be insanity if they start using it in HFC areas now that they seem to binning those upgrade plans.
it won’t be VM retail on Openreach, it’s for o2 Boradband
whatever they call it, it’ll be a VM service under the bonnet. I understand this is already the case for the “Giffgaff” service on Nexfibre, the only real difference is that you get a standalone ONT and non-VM branded router.
I’d assume they would provide the VM stream TV service over their offnet broadband service.
Why don’t they just buy Community Fibre? Would cost about the same.
If there is little or no chance of upgrading HFC areas, then RFOG builds have even less hope of an upgrade.
RFOG has always been back of the pile for everything. We were the last for 100Mb upload too.
RFoG areas are most likely to be upgraded as it’s far cheaper to convert from DOCSIS to XGSPON
VM are in a hot mess, that’s for sure. As an existing customer on their XGS-PON service, VM aren’t managing well with multiple networks. As it stands, everything is geared up for their existing HFC network.
– No option of modem mode.
– Customer service can’t help with any issues, as they don’t know anything about XGS. The scripts and processes are only geared up for HFC.
– No self service options for contract renewal, diagnostics or the ability to order additional mesh pods etc.
– Engineers who get sent aren’t trained on XGS and you usually turns into a visit lasting several hours with the engineer calling lots of people to understand what they need to do. 99% of the time it’s a back office network issue, not an issue at our end. As a result, the next comedy sketch is for them to try and find the relevant person/team to contact.
OR aren’t perfect. But at least ISPs using their products can actually manage support calls from ADSL/FTTC/FTTP customers, with the right team getting tasked to resolve the issue.
The thought of VM throwing another network into the mix is rather wild, even when you exclude the overlap of the existing network, when they can’t even actively manage the existing mix of networks.
“aren’t going to build any more fibre [FTTP] on the VMO2 balance sheet regardless of the outcome” with the CMA.
Right so that threat to stop building fibre if their deal gets rejected just went out the window then.
Youfibre came to my area and within 6 months everyone I know and there dog switched from VM to YouFibre & now we have openreacH full fibre available now as well so why on earth would anyone stay on coax from VM, make it make sense VM are a joke.
I still reckon they will hive off the physical network side of VM into Nexfibre, letting Virgin Media be an ISP in name only, free to use any network they choose to – they can then scale-up to the remaining non-covered areas pretty quickly.
There would, possibly, be some complications with the HFC network and the TV-side, but given their new box is all-IP, if someone in a HFC area wanted to order, they could likely use fibre from whomever has built in that area. HFC could then be run and managed by Nexfibre, with VM as a sole tenant ISP for that part of the network, with no new customers being added, and the network slowly run down as people leave and overbuild from FTTP networks occurs.
Takes the Capex costs off the balance sheet and, to a degree, boosts Nexfibre’s coverage, though not by huge amounts.
Then you’ll have the question of O2’s tower arrangements, but that’s a different story for another day.
The Netomnia deal seemingly collapsing means they lose the sugar daddy and are left with a big snowball of debt rolling down the hill that needs to be repaid or refinanced.
They need cash coming in and their plan addresses this by bringing in offnet punters and exploiting their existing assets for little outlay. As opposed to their recent history of major outlay and little to no growth in punters.
In my view they are doing the right thing and being one of the first to fully face up to the fibre bubble and indeed not paying way over the odds for Netomnia will actually be beneficial to them.
Not getting nearly a billion quid from InfraVia now with a bunch more later and their overbuild paid for will be beneficial to them?
Right…
“we’re halting the fibre build on VMO2’s balance sheet”
So what about Nexfibre’s then? It was never VMO2’s trying to purchase Netomina…
As the CMA wrote upgrades likely to happen anyway, just timing uncertain:
“We recognise that there is some uncertainty as to the exact timing and extent of future
network upgrades, including as a result of recent financial conditions that may
have impacted VMO2’s plans. However, we consider that the evidence shows that
there is a clear long-term incentive on VMO2 to upgrade its cable network, and our
provisional view is that, absent the Transaction, VMO2 would continue to upgrade
its network to FTTP.”
fanny adams is wrong, 90% of people dont even know what upload speed is.
Marketing has always been download. I couldn’t put a figure (like you seem to have done!) on ignorant people vs informed, but customers generally can tell the difference when sending large uncompressed photos or videos from phones to other places, or trying to store a backup of something in the cloud.
It’s a lot easier to assume that a large number of people would think they automatically would have upload speed match download speed, and that it’s not lower at all, as upload speeds on asymmetric providers have generally been hidden away in small print somewhere, focussing on download being the headline.
I wonder whether they will upgrade to a fully docsis 3.1 network or ever doscis 4.0. Currently they use both doscis 3.0 and 3.1. Upgrading that would be far cheaper than upgrading to FTTP but would allow them to offer faster speeds, especially upload speeds.
Docsis 3.0 -> 3.1 is a fairly cheap upgrade as its mainly just headend changes, presuming the current modems are 3.1 compatible (iirc their hub 4 and 5 are 3.1 compatible – so existing recent modems in customers homes are ready to go)
Docsis 3.x -> 4.0 on the other hand starts getting costly because they would also need to replace the amplifiers, splitters, and taps across the network. iirc VM judged that the cost of upgrading to docsis 4 vs upgrading to fttp only saved them ~£40 per prem passed if they opted for docsis4 over fttp, and they would be left maintaining ageing cooper. https://www.lightwaveonline.com/fttx/ftth-b/article/14207763/virgin-media-o2-switching-to-all-fiber-network-approach – note these figures are 5 years old now.
FTTP would have imo the clearer upgrade path, heck G-PON, XGS-PON, and 50G-PON can all co-exist on the same fibre, if VM started rolling out docsis 4 tomorrow, they would still have to replace their amps and prob their taps if they ever wanted to upgrade from docsis 4 to “docsis 5”.