Virgin Media O2's owners and a French investment firm will invest around £4.5bn in a new fibre network to challenge BT and smaller rivals creating ultrafast broadband services.
Liberty Global (NASDAQ:LBTYA) and Spain's Telefonica, plus InfraVia Capital Partners said the new network will also offer wholesale access to other broadband providers.
As part of the deal, the company has agreed to the investment to build a full-fibre network that will provide connectivity to up to 7mln homes.
Virgin Media O2 is in the process of upgrading its existing fibre network to serve 15.5mln premises and this would be in addition to that.
The telco will serve as the anchor tenant for the new network, which will be open to internet service providers such as TalkTalk, Vodafone and Sky.
As BT's networking division Openreach accelerates its fibre build much faster than most companies and analysts anticipated, Virgin Media O2 faces a big challenge.
Virgin Media O2, the incumbent, and the smaller so-called altnets are battling it out to lay fibre across the UK and monetise their networks.