VMO2 Says Blocking £2 Billion Netomnia Deal Would Squeeze UK Fiber Investment
The CMA’s Phase 2 review of Nexfibre’s Netomnia acquisition has become a fight over whether UK fiber needs consolidation to sustain investment or more separation to protect competition.
VMO2 is warning that a blocked £2 billion Netomnia deal would deepen the financing strain around UK fiber rollouts, turning a Competition and Markets Authority review into a test of how much consolidation the market can absorb, Light Reading's account of CEO Lutz Schüler's remarks shows.
The transaction would put Substantial Group, owner of wholesale fiber operator Netomnia and smaller retail brands including Brsk and YouFibre, under Nexfibre.
According to Light Reading, the buyer is a joint venture backed by Telefónica and Liberty Global, which each hold 25%, and Infravia, which owns the remaining 50%.
VMO2 is itself owned equally by Telefónica and Liberty Global after their 2021 merger.
That ownership map sits at the center of the regulatory issue.
Nexfibre and VMO2 argue the combination would create a stronger challenger to Openreach, while rivals have pointed to network overlap and the risk of reducing independent wholesale competition.
The CMA moved the case into an in-depth Phase 2 probe in July.
Schüler framed the market problem as an investment crunch rather than only a competition dispute.
Funding for alternative network builders has become harder to secure, and recent examples show how quickly weaker operators can move from expansion plans to restructuring.
Airband's administrators disclosed this week that the company was sold to Voneus, the only bidder, for £4.6 million.
G.Network has emerged from administration after restructuring.
Gigaclear has asked debt holders to write off 40% before another investment round, and Toob was recently denied additional funding by investor INPP, the source account noted from media reports.
Those cases give VMO2 its main argument for approval: scale, not another round of standalone funding, is needed to keep building.
Schüler said no new investors were coming into the country to invest in fiber and warned that without approval he would bet no more fiber would be built in the UK.
The promised upside is also quantified.
Nexfibre has previously put the additional investment unlocked by the deal at £3.5 billion, and Schüler repeated that figure.
He also contrasted the combined footprint with CityFibre, saying CityFibre reaches roughly 4.5 million homes while the enlarged Nexfibre position would be about three times that level.
CityFibre has pressed the opposite case.
CEO Simon Holden has urged the CMA to examine the transaction, citing overlap between Nexfibre and Netomnia networks that at one point covered about 2.5 million of Netomnia's 3 million premises.
The next step is procedural but material for operators, lenders and wholesale customers.
The CMA's statutory deadline is in December, leaving the industry waiting to see whether the regulator treats consolidation as a funding remedy or as a threat to the competitive structure it is meant to protect.
