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Sky in talks with Virgin Media as FTTP ventures attract investors

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Sky is reportedly in talks to both invest and become a customer of a full fibre venture backed by Virgin Media’s parent company Liberty Global.

According to the FT, the European cable giant registered a company called ‘Liberty Fibre Ltd’ last week and wants to build a fibre to the premise (FTTP) network serving millions of premises outside of Virgin Media’s current footprint.

The joint venture would look to expand to all parts of the UK, making use of BT Openreach’s duct and pole network.

Sky Virgin Media

Virgin Media’s existing cable network has traditionally been limited to urban areas, and although the ongoing £3 billion ‘Project Lightning’ will expand its footprint to 17 million properties, expansion has largely been focused on areas already served by Openreach.

Virgin Media itself would be the anchor tenant, but the addition of Sky would boost the venture’s aim of becoming a major competitor to Openreach in the wholesale sector.

Sky is reportedly in separate talks to become a customer of Virgin Media’s cable network. Earlier this year it was reported that Virgin was seriously considering a proposal to open up its cable network to competitors amid concerns that FTTP investments by other providers would erode its speed advantage.

The company was supposedly debating whether it made more sense to move into wholesale – a market that offers lower margins but also presents an opportunity for greater market share.

Britain has lagged behind other parts of the world in terms of fibre to the premise (FTTP) deployment, but the government now wants “full fibre” to be the default connection technology and has promised new regulations and investments to support this ambition.

Openreach is embarking on a major build of FTTP with ambitions to reach 15 million premises by the middle of the next decade. Meanwhile, other providers including TalkTalk, CityFibre, Gigaclear and Hyperoptic are also investing in infrastructure.

In a separate development, TalkTalk’s FibreNation is attracting attention from investors according to The Telegraph. The company is seeking £1 billion to build a network severing as many as three billion homes and businesses in urban areas.

Those interested include CityFibre, which has partenered with Vodafone on another FTTP venture, investment firm iCon infrastructure, and Macquarie – which won the takeover battle for KCOM.

Via FT / Telegraph