Sky Nears Deal to Back Virgin Media O2's Full Fibre Rollout

Sky will take a stake in the UK’s growing full-fibre, investing in Virgin Media’s project to bring the lightning-fast broadband technology to 14 million homes and businesses.

The companies, fierce rivals in the pay-TV market, hope their combined investment will break BT’s stranglehold on the country’s broadband infrastructure.

The newly-merged Virgin Media O2 announced in July that it will spend £1.4 billion to deliver full-fibre lines—potentially capable of symmetrical speeds of 10Gbps or more—to all premises reached by its cable network by 2028. 

Project Lightning, which has already reached 1.2 million doors, will help VMO2 retain its position as a “speed leader” for broadband as BT’s Openreach and a clutch of independent networks scramble to string gigabit-capable full-fibre across the UK.

Sky is seen as a likely partner in this build, particularly following the appointment of Dana Strong, former Virgin Media executive, as head of the company earlier this year.

Virgin Media is also holding more tentative talks with Vodafone and TalkTalk about the companies selling wholesale packages on its network. However, last month VM02 chief executive Lutz Schüler said the company was “in no hurry” to strike the deals.

Separately, Virgin Media today flipped the switch on an upgrade of its existing cable broadband network for 2.5 million premises in Brighton, Colchester, Doncaster, Derby, Gillingham, Portsmouth, Southend, Sheffield, Stoke-on-Trent, Swansea, and Wakefield. 

The upgrade, which boosts download speeds on the network to 1.1Gbps, has now reached 12.8 million residences, as Virgin nears its goal of covering all 15.5 million premises on its network by the end of the year.

Schüler said: “Our continued investment means more than three-quarters of our network is now gigabit ready, offering millions of households across the country access to future-proof services and the fastest broadband available from any major provider.”

Boris Johnson hopes to deliver gigabit-capable connections to 85% of the country by 2025. The completion of Virgin's cable upgrade, along with builds from Openreach and alternative networks like Hyperoptic and CityFibre, will take coverage to 60-65% at the end of 2021.