Virgin Media O2 in talks over funding for seven million home fibre rollout

Britain’s Virgin Media O2 said on Friday its two owners were in talks with financial partners about funding a fibre network covering seven million premises, stepping up its challenge to BT in the race to roll out ultrafast connections.

The broadband and mobile provider, a joint venture between Liberty Global and Telefonica, will be an anchor tenant of the new network, which will also be available to other operators on a wholesale basis, the company said.

Virgin Media O2 has already increased speeds on its existing network, and also plans to upgrade these connections to fibre by 2028.

The company confirmed the investment talks as it reported 142,000 fixed-line additions in 2021 and 53,000 in the final quarter, its best performance in the quarter for six years.

In mobile, it added 2.7 million connections in 2021, including wholesale customers. Virgin Media O2 added 129,000 mobile contract additions in the final quarter, it said.

Chief Executive Lutz Schuler said the eight-month-old joint venture had strong momentum, and was growing the 45% of fixed-line customers who also had mobile.

“We launched Volt, our first converged offer, we are now four months in the market and customers like the product,” he said.

Schuler said Virgin Media 02 would offer its entire network, which will eventually cover 23 million homes, to wholesale partners.

He said broadband providers such as Sky and TalkTalk would then have an alternative to BT, which aims to extend its fibre network to 25 million premises by end-2026.

“If you put yourself in the shoes of the other brands, what do you prefer: sticking to one supplier or having the option to balance one a bit with the other?”

But the company was not under pressure to strike wholesale deals.

“We are not committing wholesale revenue to finance the 7 million homes,” he said. “Virgin Media as an anchor tenant is more than enough.” US News