Virgin Media O2 launches new company in 'direct challenge' to BT Openreach

19 February 2024 , 09:23

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Virgin Media 02 aim to challenge BT Openreach with new super-fast broadband (Image: PA Archive/PA Images)

Virgin Media O2 has announced it's going to set up a new company to compete with BT Openreach.

This new part of Virgin Media O2 will focus on cable and fibre, aiming to spread super-fast broadband. The rest of Virgin Media O2, like the mobile phone bit, won't change at all.

Lutz Schuler, who's the boss of Virgin Media O2, said: "This is a logical evolution of our fibre strategy that creates a clear, focused and scaled network entity within the Virgin Media O2 family which underpins our shift to a fully fibre network and reinforces our position as the leading challenger to Openreach in the market."

"Working closely with our shareholders, this network business will provide a platform for potential altnet consolidation and wholesale opportunities in future, offering widescale network choice for other providers, as well as giving financing optionality. While nothing changes today work is well under way and you'll hear more from us later in the year."

Industry expert Kester Mann from CCS Insight shared: "Virgin Media O2's plans to move into the fixed-line wholesale market by offering access to its fibre and cable networks to other providers represents a direct challenge to BT's Openreach unit. Creating a new network company with a dedicated team could enable Virgin Media O2 to pursue merger and acquisition opportunities in the fixed-line broadband market."

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He added: "With dozens of alternative providers, the UK is ripe for consolidation and such a move would bring Virgin Media O2 crucial scale benefits. Attention will now turn to which providers would consider signing up with the new entity, how it could be regulated and whether there will be any response from Openreach."

"The move should be considered as a positive for UK broadband customers as it creates fresh opportunities for new and existing service providers and long overdue competition to Openreach."

An Openreach spokesperson welcomed the news, saying: "We welcome competition as it's great for customers and it's what Openreach was established to enable. We're proud to be investing billions of pounds to upgrade the UK's digital infrastructure and, whilst we're building further and faster than anyone else, we're also committed to supporting others who use our ducts and poles to build their own networks."

"We're confident that the unrivalled quality and breadth of our network, as well as the skill of our teams and the strength of our relationships with customers, will see us continue to be successful and deliver a bright full fibre future for the UK."

Lawrence Matheson