U.K. Regulator Keeps Broadband Businesses Separate During Merger Review
The U.K.’s Competition and Markets Authority has accepted interim safeguards requiring Substantial’s broadband businesses to remain operationally separate from nexfibre while the regulator conducts an in-depth review of the proposed acquisition.
The safeguards were accepted on July 17, 2026, and published on July 24. They are intended to prevent the businesses from being integrated, weakened or otherwise changed in ways that could affect the CMA’s review before the regulator reaches a decision. The statutory deadline for the phase 2 investigation is December 15, 2026.
What the safeguards require
Under the undertakings, Substantial must continue as a going concern and maintain sufficient resources to operate on the basis of its pre-transaction business plans. Its services, assets, facilities and goodwill must be maintained and preserved, except in the ordinary course of business.
Without the CMA’s prior written consent, Substantial also must not take action that could integrate its business with nexfibre, transfer ownership or control, or impair its ability to compete independently in affected markets. The undertakings restrict significant organizational and management changes and require reasonable steps to encourage key staff to remain.
Substantial must provide compliance statements to the CMA every two weeks, beginning July 30, and keep the regulator informed of material developments, including significant staff changes, extended interruptions, major customer changes and substantial changes involving key suppliers.
These are interim safeguards, not final merger remedies. They are designed to prevent pre-emptive action while the CMA determines whether the transaction could substantially lessen competition.
Why the deal moved to phase 2
The transaction involves nexfibre, a joint venture between Liberty Global, Telefónica and InfraVia, acquiring Substantial and its subsidiary businesses Netomnia, Brsk, Brsk ISP and YouFibre.
The parties requested a fast-track phase 2 referral on June 11, 2026. On July 1, the CMA accepted the fast-track request and referred the anticipated acquisition for an in-depth investigation. The regulator’s areas-of-focus document sets out preliminary theories of possible harm, not final findings or conclusions.
The review is examining how the transaction could affect competition in wholesale and retail broadband markets, including the relationship between network operators and internet service providers that rely on wholesale access to sell services to customers.
What Sky told the regulator
The CMA published Sky’s response to its areas-of-focus document on August 3. Sky said the transaction warrants scrutiny of wholesale access, retail competition and possible vertical effects. In its submission, Sky described itself as the U.K.’s largest independent wholesale broadband customer and argued that the deal could place an independent network and a downstream retail business within the same vertically integrated operator.
Sky also argued that Netomnia’s network overlaps with Virgin Media O2’s network across a substantial share of Netomnia’s footprint and that the transaction could reduce infrastructure competition in those areas. Those are Sky’s submissions to the CMA, not established findings by the regulator.
The CMA’s case record also lists responses from BT Group, Grain Connect and Hyperoptic. The regulator is expected to assess those submissions alongside information from the merging parties and its own analysis.
What it could mean for broadband customers
Liberty Global has presented the acquisition as a way to build a larger wholesale fibre challenger and expand coverage. The company’s projected benefits remain claims made in support of the transaction, rather than completed results.
For consumers and internet service providers, the practical stakes include the number of networks available in local areas, the terms on which ISPs can buy wholesale access, network investment, service quality, product choice and the competitive pressure that can influence pricing.
There is no indication that the interim safeguards themselves have already changed broadband prices, service quality or network rollout. The proposed acquisition remains under review and has not been cleared. The next major procedural milestone is the CMA’s statutory deadline of December 15, 2026.
Sources
- Competition and Markets Authority merger case record
- CMA interim undertakings accepted from Substantial
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