UK regulator says Nexfibre-Netomnia deal could hurt competition

UK Regulator Warns Nexfibre-Netomnia Deal Could Impact Broadband Competition

Competition and Market Concerns Over Nexfibre Acquisition

Regulatory Findings and Market Impact

LONDON, Oct 2 (Reuters) - Britain's competition watchdog said on Friday it had provisionally found that Nexfibre's acquisition of fibre broadband operator Netomnia could substantially reduce competition in the wholesale supply of fixed broadband services.

Nexfibre, a joint venture backed by Liberty Global, Telefonica and InfraVia, agreed to buy the owner of Netomnia, the country's second-largest "altnet" fibre network, for £2 billion ($2.7 billion) in February.

Potential Alternative Buyers

The Competition and Markets Authority (CMA) said it believed that if Nexfibre had not struck a deal, rival CityFibre would most likely have bought the company.

In that scenario, CityFibre would provide increased competition to both the combination of Nexfibre and Liberty Global and Telefonica-owned Virgin Media O2, and market leader BT's Openreach network.

Responses from Stakeholders

Nexfibre's Position

Nexfibre said the CMA's findings did not reflect the reality of Britain's fibre market.

"It fails to prioritise the fibre investment the country needs, and the creation of a scaled, sustainable challenger to Openreach," it said in a statement.

Next Steps in the Regulatory Process

Remedies and Final Decision Timeline

The buyers now have an opportunity to submit remedies to answer the CMA's concerns by October 16 before the regulator takes a final decision.

Implications for the UK Broadband Market

Market Expansion and Competition

The deal will add more than 3.4 million fibre premises and over 500,000 customers to the partners' British footprint, which will reach 8 million premises with full fibre by the end of 2027, challenging BT's Openreach network, which will cover 25 million premises by the end of the year.

Reporting Credits

(Reporting by Paul Sandle in London and Raechel Thankam Job in Bengaluru; Editing by Mrigank Dhaniwala and Sarah Young)