The joint venture (JV) will be 50:50 owned by Liberty Global–Telefonica and InfraVia and see an initial investment of £4.5 billion to deploy fibre-to-the-home (FTTH) across more than 5 million homes in the UK.
The fibre network will be offering FTTH wholesale access to telecommunications service providers, with VMO2 acting as an “anchor client”, entering into an agreement with the JV upon closing of the transaction. Coupled with its own fibre investments to upgrade its existing 16 million premises network, this will expand VMO2’s gigabit footprint to around 80% of the UK upon completion.
In addition, Liberty Global said the JV will “seek to attract additional third-party wholesale clients” and target homes across the UK, both adjacent to the existing Virgin Media O2 network and in new areas.
Mike Fries, CEO of Liberty Global, said: “This JV will take our aggregate FTTH footprint to up to 23 million homes, reaching around 80% of the UK. VMO2 will bring significant build expertise, and will benefit from a meaningful off-net growth opportunity and as the anchor client will support attractive returns for the JV – a winning combination.
“Finally, we are very excited to be working with InfraVia who we already partner with in Germany, and welcome the expertise they bring to the JV.”
According to the released business plan, the three partners will fund their pro rata share of equity funding for the build, up to £1.4 billion in aggregate, phased over 4-5 years. In addition, the JV has obtained £3.3bn of fully underwritten debt financing from a consortium of financing banks, including a £3.1bn capex facility when the deal is expected to close in the final quarter of 2022.
