Virgin Media O2 is reportedly seeking investors to help fund its fixed network company to challenge BT's Openreach in the UK.

As reported by Bloomberg, the carrier is seeking funding for its £5 billion ($6.6 bn) NetCo arm.

The publication reports that Virgin Media O2 is working with advisors to raise at least £1bn ($1.31bn) through the sale of a minority stake in the venture, according to people familiar with the matter.

A stake could range from 20 percent to 40 percent, while bidding could potentially begin from next month. Bloomberg notes that the telco is targeting infrastructure, private equity, pension, and sovereign wealth funds.

The company is set to spin out its cable and fiber network assets from its main structure.

In February, Virgin Media O2, along with major shareholders, Liberty Global and Telefónica, announced its ambitions to compete with Openreach.

At the time, the carrier said that the NetCo will "underpin full fiber take-up and roll-out," and provide new financing optionality and a platform for potential altnet consolidation opportunities.

At present, Virgin Media O2 and Nexfibre collectively have a full fiber footprint covering more than five million premises, while its fixed-line network passes more than 17 million premises.

Along with Nexfibre, which is an independent fiber joint venture between Liberty Global, Telefónica, and Infravia, the separate NetCo and Nexfibre networks will reach a combined total of up to 23 million homes, placing the company in a stronger position to compete with Openreach, which is aiming to deliver FTTP services to 25 million premises by 2026.

Nexfibre notably completed the acquisition of UK altnet Upp in September 2023 and plans to invest more than £350m ($440m) in Eastern England by 2026.