Virgin Media O2 seeks up to £1bn from investors for fast fibre broadband

About seven million households stand to benefit from the project

Virgin Media O2 is seeking to secure up to £1 billion from investors for fast fibre broadband. (Photo by Leon Neal/Getty Images)

Virgin Media O2 has begun talks to raise as much as £1 billion ($1.34bn) to fund the introduction of fast fibre broadband to seven million homes across the UK.

Informal discussions with infrastructure funds have been taking place for weeks, with the aim of selling a large stake in a newly-created corporate entity, Sky News reports.

This week the firm will begin contacting potential investors to help fund its vision.

The British media giant is thought to want to create an entity to rival BT Group’s Openreach arm.

Sources said Liberty Global and Telefonica were leading the process.

Last year, Virgin owner Liberty Global and Spain's Telefonica agreed on a multi-billion-pound merger, to make it one of the country’s biggest communications businesses.

Homes in parts of Britain where Virgin Media O2 does not have a major presence are set to benefit from the project and regions where copper lines are the only ones currently in use will be targeted.

The future entity is planned to be open access, unlike Virgin Media O2’s existing network. Other broadband providers will have the option of using the network.

Vodafone and Sky are seen as the big beasts of the UK’s broadband market and they will decide whether to sign capacity deals with either BT Openreach or Virgin Media O2.

Last year, Virgin Media O2 said it would upgrade its entire network serving 15.5 million premises to full fibre by 2028.

Its immediate rival BT has also set a target of providing fibre-broadband to 25 million premises, by the end of 2026.

Earlier this month Virgin Mobile and O2, both part of Virgin Media O2, broke ranks to announce they would not be introducing post-Brexit roaming fees for customers.

Over the coming months, millions of Britons’ entitlement to free roaming while in Europe is set to end.

EE, Vodafone and Three have all announced that European Union roaming fees will return between January 31 and May 23, but Virgin Mobile and O2 said customers would be able to continue to use their data and make calls and texts on the same deal while they are on the continent.