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Macquarie takes control of Voneus as UK full fibre push finally begins

UK alternative broadband provider Voneus is finally connecting its first customers to full fibre thanks to financial backing from Australia’s Macquarie Capital, now its majority owner.

It is more than 18 months since Voneus, then solely a fixed wireless access (FWA) provider named Macquarie as a new investor. Macquarie said it would invest up to £30 million in Voneus over an unspecified period of time, starting with an initial £10 million commitment.

“FWA provides an immediate solution to poor broadband. However, Voneus now intends, with Macquarie Capital’s support, to connect its more established communities to full fibre broadband, enabling rural homes and businesses to receive up to 1 GBs of reliable, consistent, ultrafast connectivity,” Voneus said at the time.

The transition to fibre has taken longer than we might have expected.

On Thursday Voneus revealed that Macquarie Capital’s Infrastructure Principal and Projects unit has now taken a majority shareholding and that it has begun its first full fibre installations at a number of its longstanding communities, including Buckland Dinham in Somerset and Dunton in South Bedfordshire.

“As we connect our first full fibre customers to our network, we do two things. One, we bring gigabit capable connectivity to a rural community and, two, we validate our fixed wireless access to full fibre model – which makes smaller-scale fibre investment sustainable,” said Voneus chief executive Steve Leighton, in a statement.

Essentially, Voneus’ model is to supply FWA-based broadband as a quick solution for customers in underserved areas, giving them connectivity in the 30 Mbps to 50 Mbps range. In areas in which it is well-established as a broadband provider, it will upgrade its offer to include full fibre, backed by Macquarie’s cash.

Macquarie has brought in a fellow investor, the Israel Infrastructure Fund (IIF), to – in its own words – “further accelerate Voneus’ growth.” It did not disclose the exact nature of IIF’s participation, or rather the size of its contribution, but noted that the outfit will bring expertise to help Voneus deploy fibre in the UK. Indeed, IIF’s current portfolio includes Unlimited, a wholesale fibre platform rolling out FTTH to hundreds of thousands of households in Israel.

“This investment is in line with IIF’s strategy to be a part of the digital infrastructure space, which is now widely regarded as an essential infrastructure asset – to be treated on par with utilities such as water, gas and electricity,” said IIF co-founder and managing partner Yaron Kestenbaum.

The UK government couldn’t resist chipping in too. Digital Infrastructure Minister Matt Warman described Macquarie’s investment in Voneus as “great news for the UK’s flourishing telecoms industry and for the rural communities currently struggling with slow speeds.”

Voneus did not commit to participating in Project Gigabit, the new name for the government’s scheme to help fund the rollout of gigabit-capable broadband to hard-to-reach areas, but said it is “well positioned” to do so. Voneus itself has shared a target of connecting 100,000 rural homes to fibre in the near term.

Macquarie is building a solid presence in the UK fixed network markets, having bought KCOM round about the same time it agreed to invest in Voneus, in August 2019. Its and IIF’s interest in Voneus is a further sign if any were needed of the investment community’s current love affair with infrastructure assets. That attraction shows no sign of abating any time soon, which is good news for the fixed broadband sector as a whole.

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