Virgin Media O2 has agreed to buy Russian-backed broadband provider Upp, which Britain demanded be sold last year due to security concerns.
Upp, which provides fibre internet in the East of England and the East Midlands, was owned by Luxembourg investment manager Letter One, a group backed by Russian oligarchs.
These included the billionaire co-founder of conglomerate Alfa Group Mikhail Fridman, who was sanctioned by the UK following Russia’s invasion of Ukraine.
Letter One was told by the Government last December to get rid of Upp, amid concerns that the company’s ownership could be ‘a risk to national security’.
Although Virgin Media O2 did not disclose precisely what it paid for Upp, it is thought to be worth less than £100million.
Network: Upp, which provides fibre internet in the East of England and the East Midlands, was owned by Luxembourg investment manager Letter One, a group backed by Russian oligarchs
Virgin Media O2 plans to sell it on to a joint venture called Nexfibre within a year.
Upp specialises in ‘alternative networks’ and has 4,000 customers, offering broadband services to about 175,000 locations in England.
Lutz Schuler, chief executive of Virgin Media O2, said the company had a ‘clear strategy in place to be the biggest fibre challenger in the country’.
The firm is a telecoms merger between US group Liberty Global and Spain’s Telefonica.
Matthew Howett, of Assembly Research, said: ‘The announcement could well be the first domino to fall in terms of an altnet being bought by one of the big players.’
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