CMA's Fast-Tracked Phase 2 Probe Raises Competition Concerns Over nexfibre's Acquisition of Substantial
The Competition and Markets Authority is running a fast-tracked Phase 2 in-depth merger inquiry, referred on 1 July 2026 at the parties' own request, into the anticipated acquisition by nexfibre, the joint venture between Liberty Global, Telefónica and InfraVia, of Substantial, the fibre broadband group encompassing Netomnia, Brsk, Brsk ISP and YouFibre. Liberty Global and Telefónica are the joint owners of Virgin Media O2, giving nexfibre a significant existing footprint in UK broadband infrastructure. The deal represents a further round of consolidation in the UK's alternative network (altnet) sector, where smaller fibre builders have faced mounting pressure from rising build costs and intensifying competition with Openreach. The CMA's investigation will assess whether the combination substantially lessens competition across the relevant broadband and wholesale fibre markets. The CMA's provisional findings, published in early October 2026, point to a likely substantial lessening of competition in wholesale fixed broadband; a final decision is due by the statutory deadline of 15 December 2026.
Why this matters
UK altnet consolidation has accelerated sharply as capital costs have squeezed smaller fibre builders out of the market. nexfibre's acquisition of Substantial would bring together several regional fibre challengers, Netomnia, Brsk and YouFibre, under a vehicle already backed by two of Europe's largest telecoms groups, materially shifting the competitive dynamics below Openreach. The CMA's scrutiny is the critical gating event: the authority must assess whether a combined entity would reduce competitive pressure on Virgin Media O2's own network or foreclose wholesale access to independent ISPs. The outcome will signal how far the regulator is willing to permit infrastructure consolidation in a sector it has previously sought to keep competitive through the Strategic Review of Digital Communications.
On the Ground
The inquiry activates competition, telecoms regulatory and corporate M&A practices simultaneously. Competition counsel will be preparing the merger notice and substantive filing, while regulatory specialists will be mapping wholesale broadband market definitions and SMP obligations relevant to the CMA's competitive assessment. Deal counsel will be advising on any hold-separate obligations during the Phase 2 period. A trainee on this matter would be expected to assist with document collection and review for the information notice, draft sections of the merger notice covering market share data, and prepare a chronology of the regulatory history of each target entity.
Interview prep
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“What competition law issues does the CMA need to resolve before it can clear the nexfibre acquisition of Substantial?”
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