Liberty Global is exploring a plan to carve out its network assets, effectively splitting off its telecom infrastructure assets – such as its fiber and HFC network – from its services business that provides mobile, broadband, phone and TV services, Bloomberg reports.

Execs at Spain's Telefonica SA, which co-owns Virgin Media O2 with Liberty Global, are open to applying that idea to the recently merged UK business, the report added, citing unnamed people familiar with the discussions.

Bloomberg said Liberty Global has engaged Accenture to explore the idea, noting that Liberty Global also co-owns VodafoneZiggo (a Holland JV), Belgium's Telenet Group Holding and Sunrise UPC in Switzerland.

Bloomberg said such a restructuring could help Liberty Global ride demand for pure digital infrastructure plays and raise funds for network upgrades and expansions.

Appetite for new infrastructure deals

Liberty Global has already shown some appetite for new infrastructure buildout projects. That includes the recent formation of a new joint venture called Liberty Networks Germany. There, Liberty Global Ventures has teamed with private equity firm InfraVia Capital Partners to explore FTTP network buildout opportunities in greenfield areas.

Additionally, Liberty Global has separated dozens of data center facilities and placed them in AtlasEdge, a new JV with Digital Colony.

Liberty Global declined to comment on the report, but Bloomberg said Virgin Media O2's fixed line network in the UK could be worth about $13.5 billion alone. That estimate is based in part on the multiple achieved when Italy's Open Fiber sold a stake to Macquarie in August and any additional premium Liberty Global might get from the UK's different economic and competitive landscape.

That assessment would also come in the wake of Virgin Media O2's ambitious plan to upgrade its entire UK network to fiber-to-the-premises (FTTP) over the next seven years. Speaking about the plan in July, Liberty Global CEO Mike Fries stressed that Virgin Media O2 isn't about to decommission its HFC network, but did view the FTTP play as an "overlay," with customer FTTP installations to be done on an on-demand basis.

According to Bloomberg, Virgin Media O2 has also held talks with Comcast-owned Sky on collaboration projects, including the potential for network co-investment.

Fries has been talking up ways for Liberty Global to scale up and maximize value of its fixed-mobile operations, referring to them as the company's "crown jewels of our business."

"As we provide more visibility to our infrastructure and network strategies, you're going to see that these are largely offensive," Fries said in July on the company's Q2 call. "In many cases, like the UK, they come with significant strategic opportunities around new revenue streams, network financing and strategic partnerships."

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— Jeff Baumgartner, Senior Editor, Light Reading