Jul 29, 2022
Virgin Media O2 secures £4.5bn investment to expand fibre footprint
Virgin Media O2 has secured billions of pounds in investment for a fibre-building joint venture with owners Telefónica and Liberty Global as the group seeks to challenge BT and smaller rivals that are rapidly laying ultrafast network infrastructure. This is in addition to the 15.5mn premises that Virgin Media O2 is at present upgrading its existing fibre network for. A big challenge for Virgin Media O2 is that BT's networking division Openreach has rapidly accelerated its fibre build, moving much faster than most companies and analysts anticipated. The race is now on among the incumbent, Virgin Media O2 and the smaller so-called altnets to lay fibre across the UK and monetise their networks before others get there first. "We are now a clear alternative to Openreach - we will have a future-proof network" said Lutz Schüler, chief executive of Virgin Media O2. The new joint venture is set to expand Virgin Media O2's footprint to cover 80 per cent of the UK, from roughly 54 per cent today, initially seeking to roll out fibre to 5mn homes not currently served by the company by 2026, with the opportunity to expand to an additional 2mn. Liberty Global and Telefónica together and InfraVia Capital have each committed £700mn in equity to the venture over four to five years, while a consortium of banks has provided a further £3.3bn in debt financing.
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