The UK Competition and Markets Authority (CMA) is consulting on remedies for nexfibre’s proposed Substantial deal, valued at £2 billion on an enterprise-value basis, after provisionally finding it could weaken wholesale competition.
The CMA’s Oct. 2 interim report described a provisional risk to rivalry among wholesale fixed-broadband networks across the companies’ combined fiber-to-the-premises (FTTP) areas. It said reduced competition could affect prices and service for households and businesses, particularly in the Midlands and northern England, where Substantial’s network is concentrated.
In a consultation published Oct. 20, the regulator named prohibition as one possible remedy and invited views on other practicable options. It has not judged whether any option would address its concerns.
The CMA’s comparison starts from a scenario in which CityFibre would have acquired Substantial if nexfibre’s proposal did not proceed. Assuming Virgin Media O2 upgraded its entire cable network to FTTP, the regulator estimated that Openreach, VMO2/nexfibre and CityFibre would all compete across about 32% of the VMO2/nexfibre network. Its estimate for that overlap was about 18% if nexfibre acquired Substantial.
InfraVia, Liberty Global and Telefónica, nexfibre’s shareholders, disputed the CMA’s scenario in a joint statement and called the interim report “fundamentally flawed.” They said they declined to propose a remedy because they did not believe one could address the regulator’s assumptions. Liberty Global and Telefónica also own Virgin Media O2, nexfibre’s only current customer.
The buyers announced the transaction Feb. 18. They said it would create a larger wholesale challenger to BT Openreach and projected £3.5 billion in nexfibre capital spending from 2026 to 2040. The deal covers Substantial businesses including Netomnia, Brsk, Brsk ISP and YouFibre.
The CMA’s notices set Oct. 23 for comments on the interim findings and Oct. 27 for remedy proposals. The authority’s statutory deadline for a final decision is Dec. 15.
