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Broadband ISP Virgin Media (O2) has revealed that their joint expansion of 2Gbps speed FTTP broadband with nexfibre has now reached 94,867 new homes in Belfast (Northern Ireland), 68,631 in Birmingham, 56,652 in Leeds, 65,121 in Coventry and 63,870 in Stoke-on-Trent. But interestingly, the provider still expects to reach their target of “5 million homes across the UK by 2026“.
“Our latest rollout … is part of our goal to deliver high speed full-fibre (FTTP) connections to 5 million homes across the UK by 2026. We’ve already reached a total of two million premises passed and ready for service, and we’re continuously expanding and improving our network to give you the latest and greatest broadband technology,” said a string of recent VMO2 build progress updates.
The updates are interesting because they come in the wake of a significant slowdown in nexfibre’s roll-out pace (here and here), which was triggered after co-parent Telefonica launched a Strategic Review of their global business. The decision resulted in nexfibre scaling back their deployment – now aiming to reach just 2.5m premises in 2025 (down from c.3m) – and Virgin Media scrapping the semi-separate NetCo plans for opening up their existing consumer broadband network to wholesale (here).
Suffice to say that this has triggered some uncertainty over nexfibre’s future build targets, since reaching the original goal of 5m by the end of 2026 would now be very difficult. But the latest updates suggest that, despite all these changes, VMO2 still expects nexfibre to reach their 5 million premises target on time.
The most likely solution to bridging this gap in expected deliverability is through consolidation of a rival network or two, which is something that nexfibre and VMO2’s leadership has recently been talking-up. But we’ve yet to hear of any new agreements being made on this front and that will need to happen soon in order to meet the target, not least since network integration work often takes a very long time (nexfibre understands this after their lengthy integration of Upp – here).
So the fact we’re still seeing that 5m target being stated as boldly as before, given all the recent events, does perhaps indicate that they must have some reasonable expectation of an M&A (merger and acquisitions) agreement or two being signed in the near future.