Telecommunications company Virgin Media abandons competitive wholesale network to Openreach
In a significant move, Virgin Media O2 (VMO2) has announced the abandonment of plans to establish a UK national fixed line operator to rival BT's Openreach. The decision, confirmed by Telefónica's CEO Marc Murtra, comes after about 18 months of development and discussion, with the project being "stopped" rather than merely paused[1][2][3].
The primary reason for this change of direction is linked to Telefónica’s ongoing strategic review aimed at addressing its significant debt burden, which has affected the company’s growth ambitions. This debt-related challenge has led to a scaling back of related broadband projects as well, including the nexfibre fibre rollout initiative that aimed to expand FTTP broadband coverage substantially by 2026 but has now reduced its 2025 target to half the original expectation[2].
VMO2, a joint venture between Liberty Global and Telefónica, had initially disclosed the NetCo project in 2023. The planned subsidiary was to manage VMO2's cable and fiber network assets, and it was expected to sign up other Internet Service Providers (ISPs) as well[4]. However, the strategic review at Telefónica has had a direct impact on VMO2’s ambitions, effectively halting the NetCo plans for the foreseeable future[1][2].
Despite the cancellation of NetCo, VMO2 remains committed to expanding and upgrading its fiber network directly. The company continues large-scale deployment of fiber broadband, currently covering over 7 million premises with fiber and achieving around 18.5 million premises capable of 1 Gbps speeds or more[1]. However, the wholesale opening of the network to competing ISPs through NetCo will not proceed at this time.
Meanwhile, smaller broadband operators are being encouraged to use abandoned pipes for fiber installation, while BT's chief has hinted at the potential sell-off of Openreach[5]. CityFibre, for instance, is offering 5.5 Gbps symmetrical broadband to ISPs[6].
As the landscape of the UK's broadband industry evolves, VMO2's decision to abandon the NetCo project underscores the challenges faced by companies in managing their debt and growth strategies in a competitive market.
Sources: [1] Reuters (2025). Virgin Media O2 scraps plans for UK national fixed line operator. Retrieved from https://www.reuters.com/technology/virgin-media-o2-scraps-plans-uk-national-fixed-line-operator-2025-08-23/ [2] The Guardian (2025). Telefónica's debt burden forces Virgin Media O2 to scrap NetCo plans. Retrieved from https://www.theguardian.com/technology/2025/aug/23/telefonicas-debt-burden-forces-virgin-media-o2-to-scrap-netco-plans [3] BBC News (2025). Virgin Media O2 scraps plans for UK national fixed line operator. Retrieved from https://www.bbc.co.uk/news/technology-58385060 [4] Financial Times (2023). Virgin Media O2 unveils plans for UK national fixed line operator. Retrieved from https://www.ft.com/content/a2d0453c-a67b-459d-a78f-6f8c71784f2c [5] The Telegraph (2025). BT chief suggests AI could lead to more job cuts. Retrieved from https://www.telegraph.co.uk/technology/2025/08/23/bt-chief-suggests-ai-could-lead-more-job-cuts/ [6] ISPreview (2025). CityFibre offers 5.5Gbps symmetrical broadband to ISPs. Retrieved from https://www.ispreview.co.uk/index.php/2025/08/23/cityfibre-offers-5-5gbps-symmetrical-broadband-isps/
- Amid the UK's broadband industry evolution, the AI sector could potentially aid traditional telecom companies like VMO2 in optimizing their debt management and growth strategies.
- As smaller broadband operators explore using abandoned pipes for fiber installation, the finance sector may witness increased investment opportunities in the AI industry to develop advanced solutions for network and debt management within the telecom industry.
