Virgin Media O2 owners to buy British fibre firm Substantial for $2.7 billion

Wed, 18th Feb 2026 15:42

Feb 18 (Reuters) - A consortium including Liberty Global agreed on ‌Wednesday to buy British alternative fibre provider Substantial Group for 2 billion pounds ($2.72 billion) in a ⁠bid to take on BT Openreach.

The acquisition ⁠will be made through an existing three-way joint venture between Virgin Media O2 co-owners - Liberty and Spain's Telefonica - and private equity firm InfraVia.

It is expected to unlock 3.5 billion pounds in investment in the UK as ‌they bet on consolidation in Britain's fibre broadband market, the three companies said in a joint statement.

"By bringing our strengths together, we are creating a scaled and financially secure wholesale fibre challenger to BT Openreach - one that will enhance competition, strengthen the UK’s digital infrastructure and deliver greater choice and quality for ‌consumers and businesses," they said.

Infravia is set to own 50% of the enlarged nexfibre, while Telefonica, Liberty Global and ‌Virgin Media O2 will hold the remaining half.

They added they would commit 1 billion pounds in new net funding for nexfibre to fund the transaction, with Infravia contributing 850 million pounds, while Telefonica and Liberty Global will jointly put up 150 million pounds.

Substantial ‌Group owns fibre network Netomnia, Britain's second-largest full-fibre alternative broadband provider.

As a result of the deal, which is expected to be completed in the third quarter of ⁠this year, ⁠nexfibre will reach 8 million homes or businesses by ‌the end of 2027, Telefonica said, bringing the combined coverage for nexfibre and Virgin Media O2 to 20 million premises.

Britain is one of Telefonica's four core markets alongside Spain, ‌Brazil and Germany. In its new strategy, the firm aims to significantly bolster its British network.