VMED O2 - comment

Ofcom have given green light to BT’s ambitions to roll out its own new wholesale fibre offer. The move by BT highlights how VMED O2’s ownership of its own fibre network is a competitive advantage over Sky due to the higher speeds available. We think greater access to fibre via BT’s network will impact VMO2’s customer retention, but the impact will be evolutionary, not transformational - if and when it is introduced, as BT also risks cannibalising its own broadband subscriber base if it under-prices its wholesale fibre offering. Nonetheless, Broadband competitors like Sky being able to move more customers to fibre will increase competition for VMED.