Sky closes in on broadband investment deal with Virgin Media O2 – Telegraph.co.uk

Sky is closing in on a deal with Virgin Media O2 to become an investor in the telecoms operator’s full-fibre broadband rollout.

The pay TV provider is in talks about backing the newly merged company’s plan to challenge BT’s dominance by upgrading 14m homes and businesses to ultrafast broadband.

Virgin Media O2 revealed in July that it would build upon the 1.2m homes connected to full-fibre through Project Lightning by vastly expanding its broadband network over the next seven years.

The move is expected to intensify its challenge to BT’s infrastructure builder Openreach by handing more opportunities to offer wholesale access to broadband retailers.

The Sunday Telegraph understands it is also engaged in separate discussions with Vodafone and TalkTalk about the two companies becoming wholesale customers.

Broadband builders are under pressure from Boris Johnson to upgrade 85pc of the UK to gigabit speed broadband by 2025.

BT is planning to spend £15bn on upgrading 25m homes and businesses from copper phone networks to faster full-fibre broadband by December 2026.

The telecoms giant is also seeking an outside investor for a joint venture with Openreach that will upgrade 5m homes to full-fibre as part of its 25m target.

Meanwhile, Virgin Media O2 will continue to develop its cable network as it attempts to bring 1 gigabit speeds to 16m homes by the end of this year.

The prospect of a full-fibre investment partnership with Sky strengthened after Dana Strong, the former Liberty Global and Virgin Media executive, became boss of the company earlier this year.

Virgin Media O2 sealed its £31bn merger in April, creating a telecoms giant with revenues of £11bn and 47m customers. It is jointly owned by Telefonica and Liberty Global, the New York-listed company controlled by billionaire “cable cowboy” John Malone.

The Sky talks come after Liberty Global’s investment arm joined forces with the buyout fund InfraView Capital Partners in September to explore building a full-fibre network in Germany.

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