Liberty Global reportedly plans to create its own fibre joint venture in a move that would expand the reach of its Virgin Media cable business and create a competitor to Openreach.
According to the FT, Liberty Global is seeking co-founders for the venture and hopes to attract infrastructure funds looking to invest in the UK.
Britain has lagged behind other parts of the world in terms of fibre to the premise (FTTP) deployment, but the government now wants “full fibre” to be the default connection technology and has promised new regulations and investments to support this ambition.
BT-owned Openreach is embarking on a major build of FTTP with ambitions to reach 15 million premises by the middle of the next decade. Meanwhile, other providers including TalkTalk, CityFibre, Gigaclear and Hyperoptic are also investing in infrastructure.
The sector is attracting significant interest from investors, as demonstrated by the proposed £627 million takeover of Hull-based telco KCOM by Australian infrastructure investor MIRA. Virgin Media itself had been linked with a bid.
The joint venture would look to expand to all parts of the UK, making use of Openreach’s duct and pole network. Virgin Media’s existing cable network has traditionally been limited to urban areas, and although the ongoing £3 billion ‘Project Lightning’ will expand its footprint to 17 million properties, expansion has largely been focused on areas already served by Openreach.
It has been suggested Virgin Media would be the ‘anchor tenant’ for the joint venture with other operators invited to use the infrastructure as an alternative to Openreach.
Earlier this year it was reported that Virgin was seriously considering a proposal to open up its cable network to competitors amid concerns that FTTP investments by other providers would erode its speed advantage.
The company was supposedly debating whether it made more sense to move into wholesale – a market that offers lower margins but also presents an opportunity for greater market share.
Virgin Media and Liberty Global have both declined to comment on these latest reports.
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