Nexfibre’s £2bn deal for rival Netomnia could lessen competition, CMA says

Nexfibre must put forward plans to appease the competition watchdog after it raised concerns over the firm’s £2 billion deal to buy rival fibre broadband firm Netomnia.

The Competition and Markets Authority (CMA) said it had provisionally found the tie-up could “substantially” impact competition in the wholesale supply of fixed broadband services in the UK.

It launched a full-scale investigation of the deal earlier this year after Nexfibre – a joint venture backed by Liberty Global and Telefonica, the co-owners of Virgin Media O2, as well as InfraVia Capital Partners – announced a deal in February to buy the owner of ​Netomnia, the ‌UK’s second-largest “altnet” fibre network.

Nexfibre said at the time that the acquisition would boost its network reach to about eight million premises by the end of 2027, which would challenge the might of BT’s Openreach network.

The CMA said it was asking Nexfibre and Netomnia’s owner Substantial, which also owns Brsk fibre broadband network provider and retail providers YouFibre and Brsk ISP, to put forward plans to allay its competition concerns by October 16.

It will then consult on these publicly before taking a final decision.

Nexfibre owners said the CMA’s interim report “does not reflect the commercial and competitive reality of Britain’s fibre market”.

In a joint statement from the group’s shareholders, they said: “It fails to prioritise the fibre investment the country needs, and the creation of a scaled, sustainable challenger to Openreach.”

They added: “This deal unlocks £3.5 billion of international investment, which would increase consumer choice and support the faster rollout of full fibre broadband nationwide.

“Standing in the way of this deal would suggest that Britain is closing the door on international investment, further entrenching Openreach’s monopoly, and leaving consumers to pay the price.

“We will continue to engage constructively with the CMA to secure an outcome that backs sustainable competition, investment and growth.”

Rival broadband altnet provider Cityfibre called on the CMA to block the deal.

A spokesperson for Cityfibre said: “The CMA is right that this proposed transaction would significantly reduce competition and risks the benefits being delivered for UK consumers: faster speeds, greater innovation and lower prices.

“After recognising that harm, it is vital that the CMA takes the next step and blocks the deal.”