Telefonica, Liberty Global move on £4.5B UK fibre JV - Mobile World Live

Telefonica, Liberty Global move on £4.5B UK fibre JV

29 JUL 2022

Telefonica and Liberty Global agreed to create a JV in the UK which will focus on building fibre-to-the-home (FTTH) networks in areas not currently served by the duo’s existing Virgin Media O2 operation.

The groups will jointly retain a 50 per cent stake via a holding company, with Telefonica’s share held by Telefonica Infra.

Financial investment company InfraVia Capital Partners is to buy the other 50 per cent stake.

The JV has been anticipated and is expected to further increase competition to BT. The venture will invest around £4.5 billion in FTTH deployments, with up to £1.4 billion provided by the three partners in the form of equity commitments. The JV also obtained debt financing of about £3 billion from a consortium of banks.

Telefonica and Liberty Global plan to deploy fibre to 5 million homes not currently served by Virgin Media O2’s network by 2026, with the potential for an additional 2 million.

Virgin Media O2 will act as anchor client and the JV will also seek other wholesale customers.

Liberty Global CEO Mike Fries noted Virgin Media O2 “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 per cent of the UK”.

The transaction is subject to regulatory approval and is expected to close in Q4 2022.

Fibre ventures abound
Fries also noted Liberty Global and InfraVia have already established a 50:50 JV in Germany, which had now started building its network and outlined plans to offers services under the HelloFiber brand.

For Telefonica, the move comes days after it created the Bluevia Fibra JV in Spain.

The Spanish group has also created FTTH vehicles in Brazil (Fibrasil, with CDPQ) and Germany (UGG, with Allianz).

Telefonica chairman and CEO Jose Maria Alvarez-Pallete commented that Telefonica Infra add the UK to its list of FTTH nations, “joining the top-tier institutions” partnering with the operator’s various businesses.