Spain scuppers Britain's £1bn broadband set to become a rival to BT

A huge deal was set to be delivered across the UK with the aim of offering an alternative to BT. However, NetCo, a £1 billion scheme, has been stopped after Spain's prime minister ordered an intervention. (VMO2), had set out to raise the funds from investors by selling shares in its new business.

VMO2, owned by both Spain's Telefonica and the US company Liberty Global, planned to sell access to its broadband network to other internet service providers such as Sky, in a major contest to BT. However, the sale process has had the brakes firmly slammed on according to Liberty Global, while Telefonica undertakes a strategic review of the deal. Original plans were meant to see NetCo launch within the first six months of 2025, yet this has now changed.

Mike Fries, the chief executive of Liberty Global, said: "We pride ourselves on being good partners and we appreciate and understand Telefonica's position.

"We're going to give them the time they need to figure it out."

Telefonica had already been plunged into uncertainty after the ousting of its long-term chief executive José María Álvarez-Pallete. His leaving is thought to have been orchestrated by the Spanish prime minister, who replaced him with Marc Murtra, who is from Blackburn.

Last year, the Spanish government became the largest shareholder in its country's communications company after it increased its shares to 10%.

The new executive Mr Mutra began a strategic review after joining as the company reported a €49bn (£42bn) loss last year. The results of the company's performance are set to be announced later this year.

The future of VMO2 has now been left in the dark as it grapples with a mounting £21.5bn debt pile. In 2024, Telefonica finalised its 50% share in the joint venture by €1.8bn.

Owners Telefonica and Liberty Global now both have the capabilities to start public offerings for VMO2.

Liberty Global's chief has stated he is open to selling off his company's stake. On Friday, he said: "We're not closing any doors."

In the first quarter of the year, VMO2 appeared to be struggling with a huge loss of 46,000 customers in the first quarter.