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CityFibre raises full-fibre table stakes to £4 billion

UK fixed infrastructure challenger CityFibre has committed another £1.5 billion for fibre deployment, taking the total investments up to £4 billion across 62 towns and cities.

While it does not want to be labelled as an ‘alt-net’ anymore, preferring the title of ‘scaled nationwide challenger’, the firm is certainly providing the financial incentive for the makeover. With plans for the deployment of full-fibre broadband now unveiled for 62 towns and cities outside of London, the infrastructure firm is increasingly becoming a very competent competitor to Openreach in the wholesale market.

“Britain’s need for a world-class digital infrastructure has never been greater which is why we stand firmly behind the Government’s plan for nationwide coverage by 2025,” said CityFibre CEO Greg Mesch. “Full fibre will play a critical role in levelling-up the UK and so today we are accelerating our plans, bringing full fibre to more towns and cities, even faster.”

Although Prime Minister Boris Johnson’s lofty ambition of 100% full-fibre broadband homes passed across the UK by 2025 is still somewhat of an unlikely target, the CityFibre plans will account for 8 million homes, roughly 30% of the UK total. Construction contracts worth £1.5 billion will be announced ahead of the summer, with all the locations named by the end of the year.

In bygone years, CityFibre has proven to be a worthy competitor in the small pockets it was able to challenge the status quo in, but since being acquired by Antin Infrastructure Partners and West Street Infrastructure Partners, CityFibre is a new beast. Thanks to the cash injection from the US financiers, the infrastructure giant has been promoted from regional nuisance to scaled wholesale alternative.

Interestingly enough, de-escalating the partnership with Vodafone is now starting to look like somewhat of a godsend. As part of the original agreement, Vodafone had exclusivity to deliver ISP services over new developments for a twelve-month period, though these commitments have now been extinguished.

With the aggressive nature of CityFibre’s deployment plan, we suspect Vodafone would not have been able to be a commercially attractive anchor-tenant for CityFibre. The new freedom to work with whoever, however, wherever and whenever is making CityFibre look like a very interesting player in the fixed wholesale game.

How much of a dent such deployment plans make in the Government ambition to be full-fibre ready by 2025 remains to be seen, Openreach and Virgin Media should not be forgotten about, though momentum is certainly gathering steam.

“We want to make sure every corner of the country benefits from world-class, gigabit speed broadband, so it is great to see CityFibre expanding out into 36 more towns and cities,” said Secretary of State for the Department of Digital, Culture, Media and Sport, Oliver Dowden. “We are working closely with industry to push ahead with a nationwide rollout and investing £5 billion so the hardest-to-reach areas aren’t left behind.”

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