A MAJOR broadband company is set to create a national fixed network company which will reach more than 20million homes.
Virgin Media O2 along with its shareholders announced last Friday that they will establish the biggest dedicated fixed network challenger in the country.
It will be the major alternative to BT's Openreach.
It will also open its existing fixed-line broadband network up to wholesale by other internet providers.
The new company, known as NetCo, will focus on completing Virgin Media O2's ongoing fibre upgrade which sees their existing cable network changed to full-fibre.
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All customers under Virgin Media O2's service will automatically connect to NetCo's full-fibre broadband from day one of operation.
Virgin Meda O2's mobile network alongside nextfibre - an independent fibre joint venture between Virgin's shareholders and Infravia - will operate separately and focus on expanding into greenfield areas.
After all planned fibre build is completed Netco and nextfibre will reach a combined total of up to 23million homes covered by full-fibre.
Development of Netco is currently underway between Virgin Media O2 and its shareholders.
The company is set to announce further details and operational timelines as the project progresses.
Lutz Schüler, CEO of Virgin Media O2, said: "This is a logical evolution of our fibre strategy that creates a clear, focused and scaled network entity within the Virgin Media O2 family which underpins our shift to a fully fibre network and reinforces our position as the leading challenger to Openreach in the market.
"Working closely with our shareholders, this network business will provide a platform for potential altnet consolidation and wholesale opportunities in future, offering widescale network choice for other providers, as well as giving financing optionality.
"While nothing changes today work is well underway and you’ll hear more from us later in the year."
The majority of providers today have spent a long time developing their systems to work on the BT Openreach network.
It will take a lot of money and time to adapt to a new platform such as Netco's.
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Another challenge providers will face is advertising new packages for consumers without causing confusing with their existing service.
It is difficult to know at this stage whether the "new" wholesale network will provide as much flexibility as they get from Openreach.
It comes after millions of broadband, mobile and TV customers are expected to be hit with a huge bill within the coming weeks.
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