Link Securities | Virgin Media O2 (VMO2), the telecommunications group controlled equally by Telefónica (TEF) and the US company Liberty, is in advanced talks with VodafoneThree regarding the use of its broadband network in the United Kingdom, according to a report in the newspaper Expansión on Monday.
If the deal goes ahead, it would represent a major step forward in VMO2’s strategy to become the alternative to BT’s Openreach, according to The Times.
Sources at Telefónica have declined to comment on this information. The Telefónica subsidiary currently operates the second largest broadband network in the UK and in recent years has been losing customers in a market with new competitors, so this agreement would be a significant boost for VMO2 as it would bring in VodafoneThree subscribers. The company does not have its own network, but it has signed various agreements with CityFibre (an independent telecommunications network provider) and Openreach, as well as Community Fibre in some urban areas.
Meanwhile, Expansión reports today that Telefónica chairman Marc Murtra acknowledged yesterday that Virgin Media O2 is considering the purchase of other fixed broadband companies in the British market. If the agreement is right, it is the most efficient and effective way to expand its fibre networks, Murtra said. The newspaper notes that one of the new targets could be CityFibre, the largest alternative telecommunications operator in the market.
