The Competition and Markets Authority (CMA) has determined provisionally that Nexfibre's £2 billion acquisition of Netomnia poses risks to competition in the UK's wholesale broadband sector. Following this assessment, the regulator has instructed Nexfibre to submit proposals aimed at alleviating these competitive concerns.
The CMA initiated its full-scale review of the transaction this year, after Nexfibre disclosed its February intention to purchase Netomnia's parent company. At the time of the announcement, Nexfibre projected that the acquisition would extend its footprint to approximately eight million premises by the end of 2027, positioning it as a stronger competitor against BT's Openreach division.
Nexfibre and Netomnia's owner, Substantial, now have until 16 October to submit remedial proposals to the CMA. The regulator intends to seek public feedback on these proposals before issuing its final determination.
In a joint statement, Nexfibre's shareholders contested the CMA's preliminary findings, arguing: "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."
The shareholders pointed to government guidance on competition policy, noting: "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'."
They highlighted the deal's investment implications, stating: "This deal unlocks £3.5 billion of international investment, which would increase consumer choice and support the faster rollout of full fibre broadband nationwide."
The shareholders further warned that blocking the transaction would send a negative signal about the UK's openness to foreign capital, cautioning: "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."
