Virgin Media O2 in Talks To Shift New Broadband Customers to BT's Open reach as £22B Debt Bites

Virgin Media O2 is in talks to use BT's Openreach network for new broadband customers outside its current footprint, as the group grapples with about £22B of debt, according to people familiar with the discussions.

The negotiations, first reported by the Financial Times and cited by Reuters, come as the company reviews its fibre rollout strategy and investment plans. No terms have been disclosed and no agreement has been confirmed. Virgin Media O2 and BT declined to comment.

Fibre Upgrade Plans Put on Ice

Virgin Media O2 has paused plans to upgrade much of its legacy cable network to full fibre, according to the FT report. A person familiar with the situation said the economics of the UK fixed-line market made the investment difficult to justify.

An Openreach deal would provide another route for Virgin Media O2 to reach customers in areas beyond its own network, potentially reducing the need to build infrastructure in at least some locations. The scale of any shift would depend on commercial terms that have not been made public.

In its second-quarter results, the company reported 5.5 million consumer fixed-line customers and a full-fibre footprint covering 9 million premises. Gigabit speeds were available across 18.8 million serviceable homes, a separate measure of network reach.

Capital expenditure across mobile and broadband totalled £2.1B in 2025, according to company disclosures. Its owners have also targeted savings of up to £600M, previous filings show.

The UK broadband market includes overlapping fibre networks, with smaller alternative network operators, known as altnets, competing with established providers in some areas. That competition increases pressure on operators to attract customers and recover their network build costs.

Mounting Debt and Investor Concern

Investor concern over Virgin Media O2's borrowing has grown. Some of its debt has reportedly traded below 70p in the pound, from around par at the start of the year, while roughly £1.7B of vendor financing notes has changed hands at about 41p.

Falling prices reflect investor concern and do not in themselves indicate a default.

Liberty Global and Telefónica, which own Virgin Media O2 through a joint venture, are also reportedly considering reducing the £200M dividend from the business.

Nexfibre Deal in Regulator's Spotlight

Separately, a proposed £2B acquisition of Substantial Group, which owns the altnet Netomnia, by Nexfibre faces regulatory scrutiny. Nexfibre is a network company jointly owned by Liberty Global, Telefónica and InfraVia.

Under the wider arrangement, Virgin Media O2 expected to receive about £1.1B in cash and an indirect 15% stake in Nexfibre in return for committing to wholesale network access across 4.6 million premises.

Of those, 2.1 million adjoin the Netomnia footprint, where Nexfibre would finance fibre upgrades, while 2.5 million overlap it, where wholesale access fees would apply.

The Competition and Markets Authority (CMA) published interim findings this month saying the acquisition could substantially reduce competition. Its investigation remains open, and the final-decision deadline is 15 December.

Reuters reported on 20 October that Nexfibre's owners intended to challenge the regulator's assessment rather than offer remedies. The outcome of the inquiry, and of the cash payment tied to it, therefore remains uncertain.