Soho Square Capital’s First Unicorn – Netomnia – to Be Acquired by InfraVia, Liberty Global and Telefónica Through Their Existing Joint Venture nexfibre

The wave of alternative fibre providers that swept into Britain's broadband market over the past five years is crashing into an inevitable shore. Netomnia, the country's second-largest altnet by premises passed, has agreed to be acquired by nexfibre — a joint venture backed by infrastructure fund InfraVia alongside Virgin Media O2's owners Liberty Global and Telefónica. What looked like a competitive free-for-all is rapidly consolidating into something far more predictable: a two-horse race.

The transaction, subject to customary clearances, will unlock what the parties describe as £3.5 billion of investment, though the timeframe and split between fresh capital and existing commitments remains unspecified. The combined entity will reach approximately 8 million premises by the end of 2027, according to the companies involved. When factored alongside Virgin Media O2's own expanding fibre footprint — also majority-owned by Liberty Global and Telefónica — the two networks will collectively serve 20 million premises.

BT Openreach, which currently provides wholesale access to roughly 37 million premises, will finally face a challenger with genuine scale. For Soho Square Capital, the London-based investment firm that served as Netomnia's first institutional backer in 2020, the exit represents a vindication of its bet on founder Jeremy Chelot. Walid Fakhry, co-managing partner at Soho Square, characterised the outcome as proof that their structure — designed to allow management teams to retain and maximise value — works as advertised.

The shakeout begins

The UK altnet sector has been bracing for consolidation since late 2022, when concerns about oversupply and profitability began to dampen investor enthusiasm. Dozens of operators emerged post-2020, many backed by infrastructure funds eager to capitalise on Britain's push for nationwide gigabit-capable broadband. What these investors found was a capital-intensive slog: building fibre networks requires enormous upfront expenditure, returns arrive slowly, and competition for the same geographic patches drove up costs whilst suppressing pricing power.

Getting cables into the ground is one thing. Persuading households to switch providers is quite another, particularly when BT's dominance gives it negotiating leverage with internet service providers who rely on wholesale access.

Netomnia itself claims more than 3 million premises passed and 460,000 connected customers. That penetration rate — roughly 15 per cent — illustrates the challenge. The nexfibre deal changes that calculus, at least in theory.

By combining Netomnia's footprint with nexfibre's existing assets and Virgin Media O2's 2 million premises earmarked for upgrade, the merged entity gains the scale necessary to offer credible wholesale terms to ISPs. Whether those ISPs will shift enough volume away from Openreach to justify the infrastructure spending is the question that will determine whether this consolidation represents rational market evolution or an expensive salvage operation.

Strategic hedging or future integration?

Liberty Global and Telefónica's involvement demands closer scrutiny. The two telecom giants jointly control Virgin Media O2, Britain's cable broadband incumbent with its own substantial network. Their separate investment vehicle, nexfibre, operates as a distinct wholesale infrastructure play.

The acquisition of Netomnia through nexfibre whilst simultaneously upgrading Virgin Media O2 premises suggests strategic hedging — maintaining optionality across different network assets and business models. Industry observers have speculated for months about whether these networks might eventually merge. Virgin Media O2's cable infrastructure reaches approximately 15.5 million homes, predominantly through hybrid fibre-coaxial technology.

By controlling both nexfibre and Virgin Media O2, Liberty Global and Telefónica can allocate capital flexibly between retail operations and wholesale infrastructure, responding to market conditions without exposing either entity to excessive competitive pressure.

Jeremy Chelot, who will serve as Group CEO of the combined Netomnia and YouFibre operations, framed the deal as 'the natural evolution of the UK's fibre market' in which 'consolidation has been inevitable'. His retail brand YouFibre, which serves customers directly rather than through wholesale arrangements, will continue operating post-close. That decision preserves brand equity whilst offering customers the financial stability that comes from operating within a larger, better-capitalised group.

What comes next

This transaction establishes a template for further consolidation. Smaller altnets without access to patient capital or clear paths to profitability face stark choices: merge, sell, or risk running out of runway. According to figures from the Independent Networks Cooperative Association, Britain now hosts more than 80 alternative fibre operators of varying scale.

Many serve niche geographic areas or operate as regional specialists. Few possess Netomnia's national footprint or investor backing. The competitive landscape through 2027 will hinge on three factors.

First, whether the merged nexfibre-Netomnia entity can deliver on its 8 million premises target without encountering the regulatory obstacles or construction delays that have plagued previous rollout promises. Second, how aggressively BT Openreach responds to the emergence of a credible wholesale alternative — pricing pressure could compress margins across the sector. Third, whether internet service providers genuinely shift volume to the new challenger or stick with the devil they know.

Britain's fibre infrastructure will ultimately support economic productivity, remote working, and digital services for decades. The question now is whether the £3.5 billion pledged for this combination proves sufficient to make the investment case work, or whether further consolidation — perhaps even absorption into Virgin Media O2 itself — lies ahead once the dust settles.