Virgin Media O2 (VMO2) is nearing a deal to use BT’s Openreach fibre network to serve new customers outside its own footprint, the Financial Times reported on 30 October. It is also reportedly pausing the upgrade of its cable network to full fibre as part of a wider cost-cutting drive. Neither company has confirmed the talks, and both declined to comment to Reuters.

No price, term or start date has been made public. BT shares rose 4.9% in morning trading. If it goes ahead, the deal would mark a sharp change of direction.

Since nexfibre launched in 2022, VMO2 and its owners have pitched the joint venture as the scaled challenger to Openreach. Renting Openreach lines would make VMO2 a wholesale customer of the network it set out to compete with. Why now VMO2 is carrying around £22 billion of debt, and a sell-off in its bonds this summer pushed one $925 million unsecured note as low as 57 cents on the dollar.

Shareholders Liberty Global and Telefónica have reportedly asked it to find around £600 million in cost savings. Trading has also softened: total service revenue fell 3.0% year on year in the first quarter, and adjusted EBITDA fell 2.9% in the second. Against that backdrop, renting Openreach offers growth beyond its footprint without the capital cost of new build.

The Netomnia link The timing is hard to separate from VMO2’s other big fibre bet. In February, nexfibre, owned by Liberty Global, Telefónica and InfraVia, agreed to buy Substantial Group, parent of Netomnia, Britain’s second-largest alternative network, at an enterprise value of £2 billion. As part of that deal, nexfibre was to upgrade 2.1 million Virgin Media cable premises to full fibre, taking the combined platform to around 8 million full-fibre premises by the end of 2027.

That plan is now in doubt. On 2 October the Competition and Markets Authority (CMA) provisionally found the deal could substantially lessen competition, and indicated it would have preferred CityFibre to buy Netomnia. Nexfibre and its shareholders have declined to offer remedies, calling the interim report “fundamentally flawed”.

A final decision is due by 15 December. Read together, the reports point to a fallback. If nexfibre cannot fund the cable upgrade through Netomnia, pausing it and renting Openreach elsewhere is consistent with a plan B.

What it means for nexfibre An Openreach deal would not replace nexfibre’s network. As reported, it covers only areas VMO2 does not already serve, and VMO2’s full-fibre footprint, including nexfibre, already reaches 9 million premises. But it weakens the case for nexfibre building further.

If VMO2, its anchor customer, can reach new homes on Openreach, there is less pressure to fund new nexfibre build. And if the CMA blocks Netomnia, nexfibre loses its main route to scale. In July, VMO2 chief executive Lutz Schüler wrote that the deal was needed “so BT Openreach faces the scaled competition it clearly fears”.

What it means for Openreach and the altnets For BT, the deal means more wholesale volume on a network it has largely built, as Openreach nears its target of 25 million full-fibre premises by December. It follows BT’s 5 October acquisition of TalkTalk and wholesale arm PlatformX out of administration, which brought around 1.5 million retail and 1 million wholesale customers and now faces a regulatory review. For altnets, the signal is uncomfortable.

Their business cases assume large retailers will buy capacity from them. One of the UK’s largest broadband providers turning to Openreach means one fewer major buyer. CityFibre, the CMA’s preferred buyer for Netomnia, has secured a further £900 million from shareholders as it plans to recapitalise.

Its case as the main independent alternative to Openreach may look stronger if VMO2’s challenger ambitions recede. The bigger question is whether the UK’s long-discussed three-network endgame, with Openreach, VMO2 and nexfibre, and CityFibre as the main platforms, still holds if the second is renting from the first. What to watch Confirmation and terms of any VMO2 and BT deal, including whether it covers business customers.

The CMA’s final Netomnia decision, due by 15 December. VMO2’s next results, for the cost programme, capex and the status of its cable upgrade. Related stories nexfibre calls for UK fibre consolidation as Assembly Research report backs Netomnia acquisition CityFibre to raise £900m from shareholders as it eyes further Openreach challenge BT considers bid for TalkTalk ITW Asia 2026 01 December 2026 ITW Asia brings together the whole connectivity and digital infrastructure industry to get business done.

Join 1700+ leaders from carriers, MNOs, cloud solution providers, hyperscalers, content service providers, data centres, satellite operators, investors, regulatory authorities and more, to define the future of connectivity in Asia. Register now See event details