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Liberty Global chief executive Mike Fries said business secretary Jonathan Reynolds is “anxious” for large telecoms companies to purchase the UK’s struggling “altnet” broadband providers over fears many could collapse and leave customers without internet.
At an industry conference on Tuesday, Fries claimed Reynolds wanted to see Liberty — which owns 50 per cent of UK provider Virgin Media O2 — and other large players step in and buy altnets.
Fries indicated that Liberty intended to do so.
“I was on the phone with Jonny Reynolds . . . the other day and he gets it: It’s not a good moment for the UK right now if fibre customers lose service and fibre investors lose money,” Fries said. “They’re anxious to see us and others [get] involved here, you know, and we will,” he added.
One aide to Reynolds said there was no record of any such comments in the official readout of his meeting with Fries.
“No one at the meeting remembers him [Reynolds] saying this,” the person said. “It seems that something might have been inferred from Johnny’s warm tone but this is a commercial decision for them [Liberty Global], not for us.”
The UK has hundreds of altnets that are building out smaller networks to challenge the dominance of BT’s Openreach and Virgin Media O2. Altnets — which collectively serve 16.4mn homes according to the Independent Networks Cooperative Association — have received more than £17.4bn of investment since 2020.
But they have since been squeezed by a rise in interest rates and a dramatic increase in costs. Altnets collectively lost more than £1.3bn in 2023, according to Enders Analysis.
The UK’s largest altnet, CityFibre, is currently racing to secure £1.5bn of fresh capital amid a funding crunch. The company is understood to be confident of agreeing a deal in the coming months, according to a person familiar with the matter.
At the conference, held this week in London by Bank of America, Fries said that while many “desperate” altnets had dropped prices as a “last gasp” to survive, they ultimately didn’t have the scale required.
Liberty’s chief joked that in the Netherlands — where Liberty Global owns 50 per cent of local operator VodafoneZiggo — they don’t “have that [altnet] shit”.
Telefónica, joint shareholder of Virgin Media O2 with Liberty, has paused plans to spin off the joint venture’s broadband network into a separate entity.
Fries said that given the process was under way, it was “highly unfortunate” and “not a well thought out position”.
Liberty’s chief added that he would still support Telefónica’s decision and that the Spanish company’s new chief, Marc Murtra, was a “smart guy” and would “figure it out”.
The two companies would have to make a decision on whether to continue in the joint venture or “do something different” within the next 24 months, according to Fries.
The Financial Times has previously reported that Telefónica is said to be contemplating a move to buy out Liberty Global from Virgin Media O2.
