InfraVia, Liberty Global and Telefónica have agreed a £2bn acquisition of Substantial Group through their joint venture, nexfibre, in a deal designed to accelerate consolidation in the UK’s alternative fibre market.

The transaction unlocks £3.5bn of projected investment between 2026 and 2040.

Substantial Group, backed by Advencap, DigitalBridge and Soho Square Capital, currently covers around 3m premises and serves approximately 450,000 customers. By completion, its footprint is expected to exceed 3.4m premises with more than 500,000 customers.

Following completion, the combination of nexfibre, Netomnia’s fibre network, and the upgrade of 2.1m Virgin Media O2 premises will create a scaled wholesale challenger to BT Openreach. The enlarged platform is expected to reach around 8m full-fibre premises by the end of 2027. Together with Virgin Media O2’s footprint, the combined networks will extend to 20m premises.

InfraVia will commit £850m of new capital, while Liberty Global and Telefónica will contribute £150m jointly, forming part of a £1bn new net funding package for nexfibre. Virgin Media O2 will commit wholesale traffic across 4.6m homes.

As part of the structure, nexfibre will sell Substantial’s retail operations, including YouFibre and Brsk, to Virgin Media O2 for £150m. In exchange for its wholesale traffic commitment, Virgin Media O2 will receive approximately £1.1bn in cash and an indirect 15% stake in nexfibre. The majority of the proceeds will be used for deleveraging.

Vincent Levita, Founder & CEO, InfraVia Capital Partners, Mike Fries, Chairman & CEO, Liberty Global and Marc Murtra, Chairman & CEO, Telefónica, said: “By bringing our strengths together, we are creating a scaled and financially secure wholesale fibre challenger to BT Openreach – one that will enhance competition, strengthen the UK’s digital infrastructure and deliver greater choice and quality for consumers and businesses.”

Completion is expected by Q3 2026, subject to customary regulatory approvals.

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