Virgin Media 02 to spin out its UK fixed network (updated)

Liberty Global

16/02/2024 14:44

(Adds CEO quote in paragraphs 5-6, background in paragraphs
7-9)
       LONDON, Feb 16 (Reuters) - 
    Virgin Media 02 said on Friday it planned to spin out its
cable and fibre network, which serves 16 million homes, into a
wholly owned new network company to enable it to better
challenge BT Openreach, the British market leader.
    Virgin Media O2, jointly owned by Liberty Global  LBTYA.O 
and Telefonica  TEF.MC , owns the second largest network in
Britain after BT Openreach, which is used by broadband companies
Sky, TalkTalk and Vodafone as well as BT's consumer customers.
        Virgin Media said the change would underpin its plan to
upgrade all of its customers to fibre. It does not currently
have rival broadband providers on its network but it said the
move would create a platform for wholesale opportunities.
  
        The mobile network will not be included in the new
company. 
  
        Virgin Media O2 Chief Executive Lutz Schüler said the
move was a "logical evolution" of its fibre strategy and it
would reinforce its position as the leading challenger to
Openreach. 
  
        "Working closely with our shareholders, this network
business will provide a platform for potential altnet
(alternative network) consolidation and wholesale opportunities
in future, offering widescale network choice for other
providers, as well as giving financing optionality," he said.
  
        BT is investing 15 billion pounds ($18.9 billion) to
expand fibre connections to 25 million premises by the end of
2026. It said this month it had reached 13 million premises, and
started building to another 6 million.
  
        Liberty Global said the change was planned for the first
half of 2025, according to an investor presentation on Friday.
  
        Liberty Global also said it would separately list its
Swiss broadband and mobile company Sunrise, and it agreed the
sale of its jointly-owned TV production company All3Media to
Redbird IMI.
  

 (Reporting by Paul Sandle; editing by William James)
 ((paul.sandle@thomsonreuters.com; +44 20 7542 6843; Reuters
Messaging: paul.sandle.thomsonreuters.com@reuters.net))