The UK's Competition and Markets Authority (CMA) has raised antitrust concerns about Nexfibre's planned £2 billion takeover of rival broadband operator Netomnia, in provisional findings that could derail the deal.

The watchdog's core objection centres on wholesale competition. Because Nexfibre and Netomnia compete as wholesale providers within their respective network footprints, the CMA identified areas of overlap where removing that rivalry could push prices up for customers.

The regulator has asked the two companies to propose remedies within the next two weeks. Interested parties have until 23 October to comment on the provisional report, and the deadline for a final decision is 15 December.

Nexfibre, owned by Liberty Global, Telefónica and InfraVia Capital, announced its move to acquire Netomnia in February. The transaction carries a £2 billion price tag and would consolidate two of the country's largest independent fibre network operators into a single wholesale giant.

The commercial case behind the deal rests on a commitment from Virgin Media O2, itself jointly owned by Liberty Global and Telefónica. Should the transaction go through, VMO2 has pledged to commit traffic across 4.6 million homes passed by the combined network.

The CMA examined that pledge closely. It noted uncertainty around the timing of the planned network upgrade, but concluded it was satisfied there is a long-term incentive for VMO2 to proceed with the commitment.

"Something that is not real"

Nexfibre's leadership has pushed back hard against the findings. CEO Rajiv Datta told Reuters the CMA's analysis does not reflect the reality of Britain's fibre market.

"This is a transaction that is fully financed, that is ready to go. It seems that they are considering something that is not real," Datta said.

His remarks underline the frustration among altnet investors, who argue the UK's fibre market is fragmented and ripe for consolidation rather than a candidate for intervention on competition grounds. Nexfibre's backers had positioned the deal as a way to accelerate network investment at a time when several independent operators are struggling with financing costs.

Counterfactual and rival objections

The CMA's report, which runs to considerable length, also addressed the counterfactual: what would have happened to Netomnia absent the deal. The watchdog said it believes CityFibre would most likely have agreed a deal to buy Netomnia itself, had Nexfibre not made its move first.

That finding matters for the competition assessment. If another large altnet would have absorbed Netomnia instead, the CMA may weigh whether an alternative transaction would have produced a more competitive wholesale structure than the Nexfibre tie-up.

CityFibre, for its part, has called on the CMA to block the deal outright. The operator, which is building its own national fibre network, has emerged as the transaction's most prominent opponent, arguing the combination would concentrate too much wholesale market power in the hands of Liberty Global, Telefónica and their affiliates.

What happens next

The timeline now runs on two tracks. Nexfibre and Netomnia must table remedies within a fortnight if they want to salvage the transaction without a full prohibition, while third parties including CityFibre can shape the record through submissions until 23 October. The CMA's final ruling is due by 15 December.

The outcome will test whether UK antitrust policy treats fibre consolidation as a threat to wholesale competition or a necessary step in a maturing market where dozens of altnets are competing for the same premises. With the final decision due in mid-December, the fate of one of the country's largest fibre deals, and the traffic commitments tied to it, rests on what remedies the two operators can offer.