UK's Virgin Media O2 (VMO2), in partnership with its shareholders Liberty Global and Telefonica, has announced plans to create a separate national fixed network company (NetCo). The company said this move is aimed at driving full fibre adoption, diversifying financing options, and facilitating potential consolidation opportunities among alternative network providers.
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NetCo: Fibre Unit
The establishment of NetCo positions Virgin Media O2 as a major alternative to BT's Openreach, offering wholesale alternatives in the UK market, said the official release.
The newly formed NetCo, a fully consolidated subsidiary of Virgin Media O2, will encompass the operator's cable and fibre network assets, covering approximately 16.2 million premises across the UK. These assets will be upgraded to full-fibre in the coming years, aligning with Virgin Media O2's ongoing network strategy.
Reportedly, NetCo will focus on completing the ongoing fibre upgrade program, enhancing the existing cable network with full fibre capabilities, and exploring financing options while pursuing wholesale opportunities. NetCo will connect Virgin Media O2's entire fixed customer base through a wholesale agreement. This move ensures revenue generation and cash flow from day one of NetCo's operation, said VMO2.
Also Read: Virgin Media O2 Boosts Rural UK Connectivity With 5G, Upgrades 4G
Collaboration and Development
Importantly, Virgin Media O2's mobile assets will remain separate from NetCo, while the independent fibre joint venture nexfibre, between Liberty Global, Telefonica, and Infravia, will continue its operations, focusing on fibre network expansion into greenfield areas.
Together, NetCo and nexfibre networks will reach up to 23 million homes upon completion of planned fibre builds, reaching around 75 percent of the UK. Collectively, Virgin Media O2 and nexfibre have a full-fibre footprint of more than 4 million premises today, the company said.
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The development of NetCo is currently underway in collaboration with Virgin Media O2's shareholders Telefonica and Liberty Global. VMO2 said further details and operational timelines will be disclosed in due course, subject to regulatory approvals. Meanwhile, fibre upgrade activities at Virgin Media O2 remain uninterrupted.
