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The CEO of Spanish telecoms giant Telefónica, Marc Murtra, has told Reuters that the outcome of their Strategic Review will see the group buying up telecom assets in Europe, which could potentially include gobbling Liberty Global’s stakes in UK broadband and mobile giants nexfibre, Virgin Media and O2 (VMO2).
In case anybody has forgotten. Telefonica and Liberty Global control VMO2 in the UK as part of a 50/50 joint venture. On top of that, Telefonica also hold a 25% stake in complementary broadband network nexfibre, alongside Liberty Global, with both companies sharing the other 50% of the £4.5bn joint venture, which is owned by the private equity firm InfraVia Capital Partners.
At the start of 2025 everything appeared to be progressing normally. Virgin Media was in the process of preparing to open up their existing broadband network to wholesale (NetCo). Meanwhile, nexfibre, which was already open to wholesale, were continuing to deploy their new full fibre (FTTP) network to areas not currently served by Virgin (aiming to reach 5 million premises by the end of 2026).
However, as previously reported (here), the nexfibre build suffered a big hit in the spring after debt stricken JV partner Telefonica launched a Strategic Review. Not only did this result in the scrapping of Virgin Media’s plans for opening up their existing consumer network to wholesale (here), but it also caused nexfibre to scale-back their coverage target for 2025 to 2.5 million premises (here) – roughly 500k premises less than originally expected (build plans beyond this remain uncertain).
Murtra’s plan
Murtra was parachuted in by the Spanish government during January 2025 to lead Telefonica and get its debts (c.£23bn) under control. Since then the company’s CEO has launched the aforementioned Strategic Review and been considering a variety of different options – due to be formally announced before the end of this year. The big question was over which one they might consider for their holdings in the UK.
According to Reuters, Telefonica now appears to be talking up the idea of growing scale through buying telecom assets and freeing up resources by selling its Spanish-speaking Latin American assets. Murtra indicated that they’re specifically eyeing assets in Germany, the UK, Spain and Brazil.
Marc Murtra, CEO of Telefónica SA, said:
“This does not require a titanic shift. All it needs is to lift the brake pedal a little bit and allow the market to operate and consolidate.”
The report suggests that Telefonica could make a play for Liberty Global’s 50% stake in Virgin Media, although we think they might also look to control and then support nexfibre in their recently expressed ambition to grow more scale through consolidation of rivals in the alternative network space. But to do any of this effectively might require an attempt to raise fresh capital, which is not an easy proposition in today’s market (VMO2 seemed to struggle to raise £1bn to support their previous NetCo plans).
The exact structure of Murtra’s plan, at least for the UK, remains subject to some speculation. But the new report does seem to lend some more credibility to earlier ones, which suggested that plans were being drawn up for Telefonica to take control of the 50/50 UK Joint Venture (JV) that it owns with Liberty Global (here).
Both Telefonica and Liberty Global do now have the right to kick off an initial public offering (IPO) for VMO2 after a lock-up period under the terms of the £31bn merger expired last year. But this is tricky, as neither side will want to take on the full burden of all those debts. The terms also allow each partner to sell its stake to a third-party 5-years after the closing, but the other shareholder still has a right of first refusal.
Never a dull day in the land of UK telecoms.