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Telefónica will consider further takeovers of UK broadband providers in a bid to strengthen Virgin Media O2 and challenge the dominance of BT’s Openreach, its chief has said.

“Absolutely, if the deal is right, it is the more efficient and effective way” of expanding its fibre networks, Marc Murtra told the FT at the Mobile World Congress in Barcelona last week.

Telefónica is doubling down on the UK as one of its four key markets alongside Spain, Germany and Brazil as part of the executive chair’s effort to refocus the group away from Latin America.

The Spanish group — which owns a 50 per cent stake in Virgin Media O2 — last month made the first move in the long-expected consolidation of the UK’s “altnet” sector, with the agreement of a £2bn deal for broadband rival Netomnia.

The deal will be done through Nexfibre — a fibre broadband joint venture also owned by fellow VMO2 shareholder Liberty Global and InfraVia Capital — which hosts thousands of VMO2 broadband customers on its network.

The upgraded Nexfibre will cover 8mn UK homes and give VMO2 access to about 20mn premises. By comparison, BT’s Openreach covers more than 30mn homes, 22mn of which have full fibre.

Murtra said: “We must help VMO2 to build all the assets and the capacities to offer a best-in-class service in range and in quality. And if BT has the best-in-class service, that is where we need to be.”

Many altnets — dozens of small fibre networks that have lured customers from BT and VMO2 with cheaper broadband offerings — are now struggling under heavy debt burdens and lower than expected uptake. 

Analysts have long expected that Telefónica, Liberty Global and InfraVia will acquire rivals, use Nexfibre’s network to offer superfast broadband to more VMO2 customers and sign wholesale deals with other providers.

VodafoneThree is currently in talks to offer broadband services via both VMO2’s fibre infrastructure and the Nexfibre network, as part of a push to double its high-speed internet customers by 2034, according to people familiar with the matter. The Times first reported details of the talks.

VodafoneThree said: “We’re always exploring opportunities to bring even greater connectivity to our customers.” VMO2 declined to comment.

The highly competitive UK market has taken a toll on Telefónica, which booked a €585mn non-cash impairment charge on VMO2 in its 2025 results.

UK-born Murtra, who has led Spain’s largest telecoms group for just over a year, has sought to streamline operations and in November announced 5,000 job cuts in Spain.

But investors have been lukewarm on his approach. Telefónica shares fell 13 per cent in a day after it said the dividend would be halved and announced no major acquisitions at a capital markets day in November. The stock has fallen 20 per cent over the past six months.

“This is a marathon, not a sprint, and we are 500 metres into the marathon and we’re exactly where we said we would be,” Murtra said, pointing to Telefónica’s recent fourth-quarter results that matched company guidance. 

However, he declined to comment on market speculation that he was in talks for a takeover of rival German telecoms operator 1&1.

Murtra, who has regularly warned that Europe risks being sidelined if the EU does not loosen regulations to support economic growth, gave a stark warning about the influence of AI: “We’ve seen the work of maybe a dozen people, or dozens of people, working for six or seven months being done in a few minutes.”