(Bloomberg) -- Virgin Media O2 has created a joint venture with infrastructure investor InfraVia Capital Partners to build between 5 million and 7 million new fiber connections across Britain.

The venture will invest £4.5 billion ($5.5 billion) in the network, the companies said in a statement on Friday. The venture will be 50% owned by Liberty Global Plc and Telefonica SA and 50% by InfraVia, and the deal is expected to close by the end of the year.

The investment will include £3.3 billion in debt and £1.4 billion in equity, the companies said. The connections will be built over the next four years, they added, taking Virgin Media O2’s footprint to 80% of the country up from about 50% today.

Virgin Media O2 will sell connections over the new network, as it does with its current business. Unlike the existing Virgin Media cable network, it will also seek to attract other carriers on a wholesale basis to resell internet service.

Liberty Global and Spain’s Telefonica created London-based VMO2 in a merger last year. Billionaire “cable cowboy” John Malone’s Liberty last year signed a similar, fiber optic joint venture in Germany with InfraVia.

It marks a major step up in the cable, mobile and TV group’s challenge to former state monopoly BT Group Plc.

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Author: Thomas Seal