Virgin Media O2 announced on Friday its intention to separate its cable and fibre network, serving 16 million households, into a new network company wholly owned by itself, aiming to better compete with BT Openreach, the leading player in the British market.
Owned jointly by Liberty Global and Telefonica, Virgin Media O2 possesses the second-largest network in the UK, trailing only BT Openreach, which caters to broadband providers such as Sky, TalkTalk, Vodafone, and BT’s own consumer base.
This strategic shift, according to Virgin Media, will support its initiative to transition all its customers to fibre.
While currently lacking other broadband providers on its network, the company anticipates this move to create opportunities for wholesale services.
Mike Fries, CEO of Liberty Global, highlighted the potential for market consolidation, particularly among smaller fibre-building companies known as “altnets”.
He remarked to analysts that the move signals a significant strategic shift in investment focus.
However, the mobile network will remain separate from the new company.
Lutz Schüler, CEO of Virgin Media O2, described the decision as a “logical evolution” of their fibre strategy, reinforcing their position as the primary challenger to Openreach.
He emphasised that the new network business would facilitate potential consolidation among altnets and offer wholesale opportunities, thereby expanding network options for other providers and providing financial flexibility.
The planned transition is slated for the first half of 2025, according to Liberty Global.
Additionally, the company disclosed plans to separately list its Swiss broadband and mobile arm, Sunrise, and confirmed the sale of their jointly-owned TV production company, All3Media, to Redbird IMI.