New investment shows UK fibre market is Trooli buoyant

Trooli this week revealed it has secured £67.5 million to spend on rolling out fibre to homes and businesses in the South East of the UK, but it looks like it will need more money to reach its deployment targets.

The firm, one of the UK’s ever-expanding patchwork of fibre builders, has agreed a senior debt facility with, it claims, attractive terms from a group of commercial lenders, aided by the support of the Connecting Europe Broadband Fund (CEBF) team, which already serves as a security trustee to the company.

“The funds will be used to expand the reach of Trooli’s Gigabit-capable network as it increases from more than 100,000 premises today to 170,000 by the end of 2021, 400,000 during 2022, and rising to one million in 2024,” Trooli said, in a statement.

But there are some questions over whether £67.5 million will stretch that far, because 1 million premises is a fair sized footprint and fibre rollout is not cheap. And indeed, the wording of Trooli’s announcement suggests that it too is looking for more cash going forward. The debt facility comes with “potential for a further increase depending on business needs,” it said.

It’s probably wise to assume that the business is going to need it.

As things stand, though, Trooli is starting to establish itself as a credible attendee at the UK fibre party.

Having launched in Kent in 2018 it has rolled out fibre-to-the-premises (FTTP) to around 70 towns and villages in Kent, East Sussex and Berkshire, and last month revealed it has passed 100,000 homes. It is also rolling out infrastructure in East Anglia – Suffolk, specifically – where it expects to go live this autumn.

“We are committed to growing our network and meeting the need for really fast, reliable Internet connections, especially in underserved rural areas,” said Ashley Atkins, chief financial officer of Trooli. “Securing this level of funding not only underpins our ambitious growth plans but is also a vote of confidence in Trooli as a business and the product we offer,” he said.

Trooli notes that it has experienced strong growth recently as a result of the Covid-19 pandemic, leading it to more than double its workforce over the past 12 months to over 170 staff members.

“Demand for our full fibre broadband has been extremely strong over the past year and we expect that to continue into the future,” Atkins said. “Despite us running a small, targeted process, the offer has been many times oversubscribed. This fresh investment clearly demonstrates the banking community shares our vision.”

Quite. As we have noted many times in recent years, there are no signs that the investment community’s love affair with infrastructure assets is starting to wane. Quite the opposite in fact. Just this week the Wall Street Journal reported that UK altnet CityFibre is on the verge of securing new debt and equity funding that would give it an extra £1 billion to spend on its fibre deployment.

CityFibre is in a different league to Trooli – and as a wholesaler has a very different business model – but the two funding injections coming at the same time serves to indicate the kind of sentiment we are still seeing in the fibre market.

There will be more money ploughed into infrastructure in the coming years, with Trooli and others on the receiving end.