Nexfibre must put forward plans to address competition concerns raised by the Competition and Markets Authority (CMA) over its proposed £2 billion acquisition of rival fibre broadband firm Netomnia.
The CMA said it had provisionally found that the deal could have a “substantial” impact on competition in the wholesale supply of fixed broadband services in the UK.
It launched a full-scale investigation earlier this year after Nexfibre, a joint venture backed by Liberty Global, Telefonica and InfraVia Capital Partners, announced in February that it had agreed to buy Substantial, the owner of Netomnia. Liberty Global and Telefonica are co-owners of Virgin Media O2.
Netomnia is described in the supplied report as the UK’s second-largest “altnet” fibre network. Nexfibre said when the deal was announced that the acquisition would expand its network reach to about eight million premises by the end of 2027, creating a challenge to BT’s Openreach network.
The CMA has asked Nexfibre and Substantial, which also owns Brsk fibre broadband network provider and the retail providers YouFibre and Brsk ISP, to submit proposals aimed at allaying its concerns by October 16. The CMA will consult publicly on the proposals before making a final decision.
Nexfibre’s owners said the CMA’s interim report “does not reflect the commercial and competitive reality of Britain’s fibre market”. In a joint statement, the shareholders said the deal would unlock £3.5 billion of international investment, increase consumer choice and support the faster rollout of full-fibre broadband nationwide.
They said blocking the deal would risk entrenching Openreach’s position and leave consumers to pay the price. They added that they would continue engaging with the CMA.
Rival broadband altnet provider Cityfibre called on the CMA to block the acquisition. A Cityfibre spokesperson said the transaction would significantly reduce competition and risk the benefits of faster speeds, greater innovation and lower prices for UK consumers.
