The UK Competition and Markets Authority has provisionally found that Nexfibre's £2 billion acquisition of rival altnet Netomnia could "substantially" impact competition in the UK wholesale broadband market, and has given the companies until 16 October to propose remedies.

The CMA opened a full investigation into the deal earlier this year, after Nexfibre announced in February its plan to buy Netomnia's owner. At the time of the announcement, Nexfibre said the acquisition would expand its network to around eight million premises by the end of 2027, giving it greater scale to challenge BT's Openreach, the dominant wholesale network operator.

Under the process now underway, the regulator will consult publicly on any remedies Nexfibre and Netomnia's owner, Substantial, put forward before it issues a final decision on whether the deal can proceed, proceed with conditions, or be blocked.

The provisional finding escalates regulatory pressure on one of the largest consolidation moves in the UK altnet sector. Nexfibre and Netomnia are both wholesale full-fibre operators competing with Openreach to sell network access to retail internet service providers. A combined entity reaching roughly eight million premises would rank among the largest independent fibre networks in the country, which is precisely what has drawn the CMA's scrutiny at the wholesale level.

Nexfibre's shareholders pushed back hard against the interim report. In a joint statement, they argued the CMA has misread the market.

"The CMA's Interim Report does not reflect the commercial and competitive reality of Britain's fibre market," the shareholders said. "It fails to prioritise the fibre investment the country needs, and the creation of a scaled, sustainable challenger to Openreach."

The statement also invoked the Government's own guidance to the regulator, noting that the CMA's Strategic Steer states ministers "expect" the authority's approach to "clearly, and unambiguously, reflect the need to enhance the attractiveness of the UK as a destination for international investment."

According to the shareholders, the deal unlocks £3.5 billion of international investment, which would increase consumer choice and support a faster rollout of full-fibre broadband across the UK.

"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," they said. "We will continue to engage constructively with the CMA to secure an outcome that backs sustainable competition, investment and growth."

The clash sets up a familiar tension in UK infrastructure regulation: the CMA must weigh the near-term loss of wholesale competition from removing an independent rival against the argument that scale is needed to build a durable second national network. The Government's investment-focused messaging to the regulator adds political pressure to that calculus.

The case also lands amid a broader stretch of high-stakes CMA activity in UK telecoms and tech, following its approval of the £16.5 billion Vodafone-Three UK merger and its continuing scrutiny of Google's dominance in search.

Nexfibre and Substantial now have until 16 October to table undertakings. The CMA will then run a public consultation on any proposals before delivering its final decision, which will determine whether the combined operator can pursue its target of reaching around eight million premises by the end of 2027.