Gigaclear is working with Rothschild bankers in a bid to raise as much as £300 million to fund further fibre network rollout, it was reported this week.

Mary Lennighan

July 27, 2022

3 Min Read
Gigaclear reportedly seeks £300 million more for fibre

Gigaclear is working with Rothschild bankers in a bid to raise as much as £300 million to fund further fibre network rollout, it was reported this week.

The UK altnet is after between £200 million and £300 million in new capital, according to Sky News, which did not disclose its source. Gigaclear has had nothing to say on the matter thus far.

There is not much detail in the report, aside from the fact that the capital raising could be made up of both debt and equity. But despite the dearth of hard information, it’s a highly credible story.

Gigaclear is one of a growing number of investor-backed fibre builders in the UK, and a desire to reach out for further funding is hardly unusual. Deploying fibre is a costly business, albeit with decent potential returns, and, after a period of reticence in the market a few years ago, now everyone’s at it and the investment community is loving it.

For its part, the last funding injection Gigaclear announced came at the back end of last year. The operator detailed a £190 million facility from ING, ABN Amro, ING, Lloyds Bank, NatWest, NIBC and UKIB that was destined to help it hit its next coverage milestone.

“This round of debt funding secures our ability to deliver our target of connecting 500,000 homes and businesses to our ultrafast, full-fibre network by 2023,” said company chief executive Ian Wade, at the time.

At the end of 2021 Gigaclear claimed coverage of 250,000 UK premises, of which 200,000 were actually ready for service, and said it had 50,000 customers. It added 80,000 of the homes passed during last year alone, and reportedly upped its total by a further 50,000 during the first half of this year.

The Sky News report did not speculate on any new targets for Gigaclear, should it succeed in its latest bid for financing. But it’s probably a fair guess to say that any funding announcement will likely come with a plan to extend the network by a few hundred, or even a few hundred thousand homes.

Infracapital-owned Gigaclear is one of a growing number of small fibre builders in the UK, keen to bring high-speed connectivity to small towns and rural areas. Its coverage area is pretty wide compared to some, the firm having put cable in the ground in more than a dozen counties. But whatever their size, the UK’s alnets are building at pace and are keen to big up their own coverage compared to their rivals.

At the top end of the market, Vodafone last month claimed to have the UK’s broadest full fibre coverage at 8 million homes, although admittedly much of its network is provided by wholesaler CityFibre. On which note, CityFibre managed to raise the best part of £5 billion in June to complete the financing for its fibre infrastructure, which, amongst other things, serves to illustrate the scale difference between the UK’s altnets.

Meanwhile, talk of TalkTalk finding a buyer refuses to die, with Virgin Media O2 emerging as the latest rumoured candidate there, a move that would boost its ambitions to take on BT’s Openreach. That deal – whoever the eventual buyer turns out to be; Vodafone and Sky have both been linked with the telco – would be more about buying broadband customers than network, but it will give someone the customer base to help its fibre network rollout business model stack up financially.

And at the bottom end there remain countless smaller players like Gigaclear, doing their thing in their own area and attracting the interest of investors keen to part with their cash for a piece of the fibre action.

There may not be a lot to go on with this story so far, but we’re expecting to hear more very soon.

 

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About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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