Virgin Media has ditched plans to use its network infrastructure to create a UK national fixed line operator to rival BT’s Openreach just 18 months after the project was made public.
Last year, Virgin Media O2 (VMO2) disclosed plans to form a national fixed network operator (NetCo), backed by its shareholders Liberty Global (owner of VM) and Telefónica (owner of O2).
NetCo – a placeholder name – was to be formed as a subsidiary of VMO2, and take over the company’s cable and fiber network assets. VMO2 would then serve its existing broadband users by becoming a paying customer of NetCo, which was expecteed to be free to sign up other ISPs as well.
However, the strategy is no more thanks to an ongoing review at Telefónica which aims to deal with the company’s debt burden – said to be hindering the company’s ambitions for growth.
When asked about progress on NetCo during the company’s recent Q2 2025 earnings call for investors, Telefónica chief exec Marc Murtrar said: “The UK NetCo is not paused there and it’s not part of the strategic review. That is a decision we made and announced and that has to do with our industrial strategy and industrial way of working.”
That was a somewhat ambiguous answer. Murtra was subsequently asked by Reuters for clarification and confirmed: “The project is stopped.”
We asked VMO2 and Telefónica for comment. The latter had yet to answer at the time of publication, while VMO2 told us it disclosed that the NetCo process was paused and being reviewed during its Q1 results in May, and it was for shareholders to decide whether that process continues or not.
Preparations to create the new UK national NetCo operator were understood to be on track and proceeding to plan earlier this year, before Murtra was installed as Telefónica CEO and announced the strategic review.
To confuse matters further, VMO2 was also linked with another network operator, nexfibre, a separate joint venture between its shareholders Liberty Global, Telefónica and private equity house Infravia, via which VMO2 serves some broadband customers.
VMO2 announced its Q2 results for the quarter ended 30 June this week, declaring revenue of £2.175 billion, a decrease of 0.4 percent compared with the same period last year. This excludes handset revenue and the impact of nexfibre construction, it said.
“Regardless of NetCo we are continuing to deploy fiber at scale, have a fiber footprint of more than 7 million premises today and a total fixed network reach of 18.5 million premises – all of which can access speeds of 1Gbps and above,” a VMO2 spokesperson told us. ®