Consolidation process will see continued participation of Virgin Media O2, as confirmed by Liberty Global
Scrapped Spin-off of Virgin Media O2's Fixed Network
The proposed spin-off of Virgin Media O2's fixed network, initially planned as a subsidiary called NetCo, has been officially scrapped. Telefonica CEO Marc Murtra confirmed the decision to Reuters on Wednesday, stating that the project has been stopped, not merely paused. This means that Virgin Media O2 will retain control of its fixed network in the UK.
The joint venture between Liberty Global and Telefonica, initially focused on the Netco project, which aimed at altnet (alternative fibre networks) consolidation, continues to move forward. Although specific details about Liberty Global’s role post the scrapped plan are limited, the partnership remains committed to expanding and upgrading Virgin Media O2’s gigabit broadband and fibre rollout.
Liberty Global remains co-owner and involved in fibre consolidation efforts by investing in network improvements rather than pursuing external investors or selling stakes through the spin-off. Virgin Media O2 has continued to increase fibre coverage, reaching 18.53 million UK premises, and focusing on profitability and customer retention within a challenging market.
Mike Fries, the CEO of Liberty Global, made this statement after the group reported second-quarter results. He believes there are aspects of the Netco strategy that Telefonica agrees with and others they do not. No further details about the reasons for scrapping the spinoff plan were provided by Telefonica’s CEO.
As good partners, Liberty Global and Telefonica will work to find areas of agreement and move forward. No new plans or strategies regarding the network consolidation have been announced by either Liberty Global or Telefonica. The exact impact of the scrapped spinoff plan on the Netco project's progress remains unclear.
Sources:
- Reuters
- Financial Times
- Telecoms.com
- Light Reading
The scrapped spin-off of Virgin Media O2's fixed network has not affected the joint venture between Liberty Global and Telefonica, as both parties continue to invest in network improvements and expand Virgin Media O2's fiber rollout. However, the reason behind Telefonica's decision to scrap the Netco project remains undisclosed. The financial implications of this decision on the industry, including potential investments and acquisitions, remain uncertain.
