Vodafone Group was tipped to be exploring a fresh play to deploy fibre in the UK, through a deal with recently-separated BT infrastructure business Openreach.
The mobile company is at an early stage of talks with Openreach regarding a joint investment in a fibre rollout, which would initially target major cities and towns, The Telegraph reported. Precise costs of such a deployment have yet to be established, and the newspaper noted regulator Ofcom could play a major role in whether a deal is done or not.
Ofcom’s current rules compel Openreach to offer wholesale access to its infrastructure to all UK operators. Indeed, ensuring fair and balanced access to the network was a key part of the regulator’s decision to push BT to legally separate the infrastructure division.
The sticking point in the proposed Vodafone-Openreach joint investment would be a call by the operator to enjoy exclusive access to the fibre lines installed as part of any such venture, which would breach Openreach’s mandate.
However, The Telegraph reported Ofcom may waive the equal access requirement, effectively giving Vodafone and Openreach a green light.
If the report is accurate, it represents a revival of a previous Vodafone Group plan to shore up its UK broadband network by deploying fibre on BT/Openreach’s ducts and poles.
The approach is not unprecedented: Vodafone Group previously made similar joint investments in Spain, Portugal and Republic of Ireland.
Any joint investment with Openreach would be the final nail in the coffin of any hopes of a merger between Vodafone Group and Liberty Global, owner of UK cable company Virgin Media. Such a deal would have granted Vodafone access to Virgin Media’s UK fibre network, obviating the need for a joint investment with Openreach.
Vodafone UK already successfully operates a mobile infrastructure sharing deal with O2 UK, which could count in its favour if seeking regulatory approval for a future Openreach agreement.
In late June, Vodafone said the Beacon modernisation project involving O2 was almost 80 per cent complete, and also revealed it is exploring the potential of new base station equipment designed to simplify installation of power lines and fibre connections.