The Competition and Markets Authority (CMA) has provisionally found that Nexfibre’s £2 billion deal to acquire rival Netomnia could “substantially” impact competition in the UK’s wholesale broadband market.
As a result, the competition watchdog asked Nexfibre to come up with proposals to address its concerns over the takeover.
The CMA launched a full investigation into the deal earlier this year after Nexfibre announced plans in February to buy Netomnia’s owner. When the deal was announced, Nexfibre said the acquisition would expand its network to around eight million premises by the end of 2027, giving it greater scale to challenge BT’s Openreach.
However, now the CMA has given Nexfibre and Netomnia owner Substantial until 16 October to put forward proposals to address its competition concerns.
The watchdog will then consult publicly on the proposals before making a final decision.
A joint statement on behalf of nexfibre’s shareholders, said: “The CMA’s Interim Report does not reflect the commercial and competitive reality of Britain’s fibre market. It fails to prioritise the fibre investment the country needs, and the creation of a scaled, sustainable challenger to Openreach.
“In its Strategic Steer to the CMA, the Government states that it ‘expects the CMA’s approach to clearly, and unambiguously, reflect the need to enhance the attractiveness of the UK as a destination for international investment’.
“This deal unlocks £3.5 billion of international investment, which would increase consumer choice and support the faster rollout of full fibre broadband nationwide.”
They added: “Standing in the way of this deal would suggest that Britain is closing the door on international investment, further entrenching Openreach’s monopoly, and leaving consumers to pay the price.
“We will continue to engage constructively with the CMA to secure an outcome that backs sustainable competition, investment and growth.”
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