Virgin Media 02 has bought alternative network operator Upp from a Russian oligarch-backed investment company following UK sanctions.
Last year, British regulators ordered the sale of Upp, which received investment from LetterOne in 2021, branding the ownership by a firm backed by Russian oligarchs as a potential national security risk.
Russian oligarchs Mikhail Fridman and Petr Aven are investors in LetterOne, also known as L1, which bought Upp—then known as FibreMe—shortly after it was founded by UK telecoms executives.
British Business Minister Grant Shapps said he was particularly concerned with Upp’s “expanding full-fibre broadband network” across the UK, though LetterOne denied that the company was a security risk.
Broadband provider Virgin Media O2, together with British fibre company nexfibre, bought Upp in an all-cash deal to accelerate a UK fibre rollout, the companies said on Wednesday.
Virgin Media said it will complete the build-out by Upp, aligning the roll-out with its fibre networks and offering its broadband services.
Fibre company nexfibre is expected to buy the network assets from the company within the next year.
The roll-out is expected to expand the fibre network in the East of England to 175,000 houses. By 2026, nexfibre plans to invest a further £350 million in the region's network expansion.
Virgin Media O2’s chief executive Lutz Schüler said: “Building on the strong foundations that exist today, Virgin Media O2 and nexfibre have a clear strategy in place to be the biggest fibre challenger in the country, offering greater choice and competition to the BT status quo.”