{"id":41650,"date":"2025-05-02T17:08:33","date_gmt":"2025-05-02T16:08:33","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=41650"},"modified":"2025-05-03T07:22:41","modified_gmt":"2025-05-03T06:22:41","slug":"nexfibre-cut-2025-uk-full-fibre-target-to-2-5m-premises-as-vmo2-pause-netco-plans","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2025\/05\/nexfibre-cut-2025-uk-full-fibre-target-to-2-5m-premises-as-vmo2-pause-netco-plans.html","title":{"rendered":"Nexfibre Cut 2025 UK Full Fibre Target to 2.5m Premises as VMO2 Pause NetCo Plans"},"content":{"rendered":"

Liberty Global has confirmed that sibling nexfibre<\/a>, which is working alongside UK ISP partner Virgin Media<\/a> to deploy a new 10Gbps full fibre broadband (FTTP<\/a>) network across over 5 million premises (c.2.2m have already been built), has scaled back its coverage target for 2025 to 2.5 million premises passed. At the same time, VMO2 “have paused our NetCo plans<\/em>“.<\/p>\n

Just to recap. Nexfibre<\/a> is the product of a \u00a34.5bn joint venture (here<\/a>) between Telef\u00f3nica, Liberty Global and InfraVia Capital Partners, which originally aimed to deploy an open access full fibre network to reach \u201cup to<\/em>\u201d 7 million UK homes (starting with 5m by 2026) in areas NOT served by Virgin Media<\/a>\u2019s own network of 16m+ premises (Telefonica and Liberty Global also own Virgin Media<\/a>).<\/p>\n

NOTE:<\/strong> Virgin Media is currently the only ISP on nexfibre<\/a>\u2019s network via an \u201cexclusive partnership\u201d<\/em> (here<\/a>). But giffgaff<\/a> (here<\/a>) and other ISPs will be added in the future (here<\/a>) and Virgin\u2019s own network was also due to open up to wholesale via a new NetCo<\/strong> during H1 2025 (here<\/a>).<\/div>\n

However, the latest results from Virgin Media (VMO2) – published this morning (here<\/a>) – revealed somewhat of a slowdown in FTTP<\/a> build at nexfibre, which only added 165,000 premises in Q1 2025. But we had been expecting them, at this stage of the deployment, to start moving a bit faster in order to meet their first overage target (i.e. the change in pace came as a bit of a surprise).<\/p>\n

The answer to all this came when Liberty Global published their investment report, which was followed by details from today’s investment call – revealing several key developments. According to the report, Liberty Global are “adjusting nexfibre\u2019s build ambition to 2.5 million cumulative premises (currently at 2.2 million) by year-end 2025, retaining capital discipline in an increasingly irrational altnet environment and remaining opportunistic around M&A<\/em>” (nexfibre had previously been adding c.1 million premises per year).<\/p>\n

In addition, readers may recall that Virgin Media’s parents had been looking to raise an additional investment of \u00a31bn<\/strong> to support the NetCo project (here<\/a>), which some reports speculated could hand investors up to a 40% stake in the wholesale business. But this too has now also suffered a setback. “We have decided to pause VMO2’s potential NetCo stake sale process to align with our JV partner, but remain opportunistic on both network upgrade and development opportunities<\/em>,” said Liberty Global’s results.<\/p>\n

Since then the CEO of Liberty Global, Mike Fries, has added a little bit of extra colour to these decisions.<\/p>\n

Mike Fries said (investor call):<\/strong><\/p>\n

“In the UK, we are confirming today that we have paused our NetCo plans at the VMO2 level in order to align with Telefonica’s announced strategic review. At the same time, nexfibre has updated its plans, and will now target 2.5 million fibre homes by year-end on a cumulative basis.<\/p>\n

Let me say first that we pride ourselves on being good partners, and we appreciate and understand Telefonica’s position. Undoubtedly, we [will] have more to say about all of this as the year unfolds. In the meantime, there are multiple ways to continue to strengthen VMO2’s competitive position in the UK. Our services already reach 7 million fibre homes, and for reference, VMO2 achieved record sales and net adds last month on the nexfibre footprint. So stay tuned here.<\/p>\n

…<\/p>\n

So anyway, on the bigger issue of NetCo, I would say the following, yes, the market is evolving. And certainly, it would be potentially better to have — to be front and center with our original plans. However, nothing prevents us from entering into strategic dialogue with operators around things like consolidation.<\/p>\n

I’ll remind you that the acquisition we did earlier in the year was done by nexfibre and VMO2. So we didn’t have a Netco in that instance. And we still have a very large broadband base. We have an 18 million home network or 16 wholly owned. There are unlikely to be significant developments in the rationalization of AltNets to fibre in this market that we aren’t part of in some way. And I do believe that Telefonica would answer that question similarly, which [means] we will stay opportunistic and we will take action if things are presented to us that require immediate action, where we’ll evaluate those. So that’s where we sit.”<\/p><\/blockquote>\n

Mike also highlighted how they’ll \u201cstay opportunistic and take action<\/em>\u201d where logical and said that \u201cwe\u2019re not closing any doors<\/em>\u201d. In addition, none of this has any impact upon Virgin Media’s ongoing effort to upgrade their legacy Hybrid Fibre Coax (HFC) network to FTTP<\/a> (XGS-PON) by 2028, which is still proceeding and costing around \u00a3100 per premises passed (affordable and a necessary enhancement to stay competitive).<\/p>\n

On the nexfibre front, the JV partners appear to be responding to pressures that exist in the market and there’s a strong indication that they now view consolidation (i.e. hunting for deals with struggling rival altnets) as being a smarter use of capital than fresh build, particularly given the rising risk of overbuild with some of those same competitors.<\/p>\n

However, consolidation tends to be a slow and complex negotiation \/ process, especially while some altnets continue to have an inflated view of their own value. Time will tell how well they do on this front, particularly with CityFibre<\/a> also actively looking to secure similar agreements.<\/p>\n

The situation does of course place a big question mark over how Virgin Media will proceed now that their own NetCo ambitions appear to be on a sort of pause. Creating a viable wholesale model, without causing serious harm to their own retail base at Virgin Media, remains a particularly difficult challenge.<\/p>\n

Potential ISP partners will be looking to be treated fairly (wholesale agreements), which is always a tricky thing to balance vs the desire by some for exclusivity agreements. One benefit of Openreach<\/a>\u2019s heavily regulated business is that it affords ISPs some protection against unfair practices, and competing with that is a challenge, particularly while so much of VM’s network is still stuck on coax (they’d only wholesale the XGS-PON fibre).<\/p>\n

The need to deliver attractive pricing is another difficulty, particularly given Virgin Media\u2019s own retail reputation for hefty post-contract (after discounts) pricing. Alternative networks in this space have been aggressive on price and associated ISPs are often able to offer promises of \u201cno mid-contract price hikes<\/em>\u201c, which is something that the established giants tend to struggle with. So far, the only ISPs of any note that seem to have committed to the NetCo are those with shared parentage (Virgin Media and giffgaff<\/a>), which is a problem.<\/p>\n

Overall, the suggestion seems to be that a lot of the pressure to pause and take stock has come from Telefonica’s new strategic review, but it may also be a generally prudent thing to do – given the complex market dynamics. But quite what will emerge from all this remains to be seen.<\/p>\n

UPDATE 3rd May 2025 @ 7:18am<\/strong><\/p>\n

The Telegraph (paywall) has provided a little more colour for the source of those pressures at Telefonica (here<\/a>). The Spanish firm is feeling a fair bit of political pressure after suffering a \u20ac49bn (\u00a342bn) loss last year. Both Telefonica and Liberty Global now also have the right to kick off an initial public offering (IPO) for VMO2 after a lock-up period under the terms of the \u00a331bn merger expired last year.<\/p>\n

Suffice to say that there’s a lot of uncertainty around Telefonica’s new leadership, and we’re feeling the impact of that in the UK.<\/p>\n","protected":false},"excerpt":{"rendered":"

Liberty Global has confirmed that sibling nexfibre, which is working alongside UK ISP partner Virgin Media to deploy a new 10Gbps full fibre broadband (FTTP) network across over 5 million premises (c.2.2m have already been built), has scaled back its coverage target for 2025 to 2.5 million premises passed. At the same time, VMO2 “have […]<\/p>\n","protected":false},"author":1,"featured_media":41317,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1,1645],"tags":[56,2714,36,69,475],"class_list":["post-41650","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","category-key_uk_isp_industry_developments","tag-fttp","tag-nexfibre","tag-ofcom-regulation","tag-bt-openreach","tag-virgin-media"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/114439108394249340","error":""},"yoast_head":"\nNexfibre Cut 2025 UK Full Fibre Target to 2.5m Premises as VMO2 Pause NetCo Plans - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Liberty Global has confirmed that sibling nexfibre, which is working alongside UK ISP partner Virgin Media to deploy a new 10Gbps full fibre broadband\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2025\/05\/nexfibre-cut-2025-uk-full-fibre-target-to-2-5m-premises-as-vmo2-pause-netco-plans.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nexfibre Cut 2025 UK Full Fibre Target to 2.5m Premises as VMO2 Pause NetCo Plans - 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