Liberty Global, Telefónica and InfraVia Capital Partners announce new UK fibre network JV

Liberty Global, Telefónica and InfraVia Capital Partners have announced an agreement to launch a UK joint venture to build a new fibre network across the country.

The new business will be 50% owned by Liberty Global and Telefónica (who are already the co-owners of Virgin Media O2) and  50% owned by French private equity firm InfraVia Capital Partners.

The partnership will initially roll out fibre to 5 million homes not currently served by the Virgin Media O2 network by 2026, with the scope to expand to a further 2 million. The new company will invest £4.5 billion to create this new network, which will offer FTTH wholesale access to telecommunications service providers with Virgin Media O2 acting as the anchor client.

Mike Fries, CEO and Vice Chairman, Liberty Global, said: “This landmark agreement with Liberty Global, Telefonica and InfraVia will expand our FTTH footprint to millions of new UK homes, creating the undisputed second national fibre network in the UK. VMO2 has already committed to upgrading its entire existing 16 million footprint to FTTH. 

“This JV will take our aggregate FTTH footprint to up to 23 million homes, reaching around 80% of the UK. VMO2 will bring significant build expertise, and will benefit from a meaningful off-net growth opportunity and as the anchor client will support attractive returns for the JV – a winning combination. Finally, we are very excited to be working with InfraVia who we already partner with in Germany, and welcome the expertise they bring to the JV.”

José María Alvarez-Pallete, chairman and CEO of Telefónica said: “Telefónica has a recent track record of successfully developing broadband connectivity in many markets through strategic partnerships. These deals help each country firmly increase their competitiveness and digital infrastructure to help their companies and economy thrive. The UK is, indeed, a growth market for us and we are very excited to be partnering with InfraVia to accelerate access to next generation broadband connectivity to a larger number of UK households and adding to Telefónica Infra’s growing portfolio. 

The transaction is expected to close in Q4 2022 following regulatory approval and is subject to customary closing conditions.

Liberty struggles

Elsewhere, Liberty Global has revealed its Q2 2022 earnings in which it earned a total of US$1.75 billion in revenue, down 41.3% YoY. Its Q2 earnings from continuing operations decreased 79.5% YoY on a reported basis to US$2.28 billion, while Q2 Adjusted EBITDA decreased 45.8% YoY on a reported basis and decreased 3.6% on a rebased basis to US$649.8 million.

Across Switzerland, Belgium, the UK, Ireland and Slovakia, the operator lost 19,900 customers, making no gains in any market.