UK regulator says nexfibre's Netomnia takeover would likely harm fibre competition
The CMA's interim report finds nexfibre's purchase of Netomnia owner Substantial Group would likely reduce wholesale fibre competition.
The UK's Competition and Markets Authority has provisionally found that nexfibre's planned acquisition of Substantial Group would likely lead to a substantial lessening of competition in the wholesale fibre market, Light Reading reports.
The finding comes in an interim report, and the regulator has opened a consultation on it that closes on October 23.
Substantial Group owns Netomnia, a wholesale fibre provider with more than 3 million premises marked as ready for service. Nexfibre is a joint venture between Liberty Global and Telefónica, the parent companies of VMO2, and Infravia.
Nexfibre's shareholders rejected the conclusion. In an emailed statement quoted by Light Reading, they said the report "does not reflect the commercial and competitive reality of Britain's fibre market" and argued that it fails to prioritise fibre investment and the creation of a scaled challenger to Openreach.
CityFibre was the rival bidder
CityFibre, another UK fibre wholesaler, has been a prominent critic of the deal and wants it stopped. The CMA's report states that CityFibre also bid for the network and would most likely have succeeded had nexfibre not emerged as the buyer, according to Light Reading.
In its own statement, CityFibre said the regulator was right that the transaction would significantly reduce competition and put at risk benefits for consumers such as faster speeds and lower prices. It called on the CMA to block the deal.