CityFibre calls for UK fibre market consolidation

During a panel at Network X 2023, CityFibre’s Chief Strategy Officer said he thinks the UK would be better served by a larger challenger fibre network.

The comments were made by Rob Hamlin during a panel at the Network X event in Paris, which focused mainly on the UK fibre market. Hamlin noted all the UK altnets combined cover a similar number of premises – around 12 million – to the dominant player Openreach.

While he said CityFibre is well on the way to passing 4 million premises itself, and progressing at a rate of a million per year, he seemed keen for his company to be part of an even bigger entity. “The country would be better served by a larger challenger,” said Hamlin.

Dana Tobak, Founder and CEO, of fellow UK altnet Hyperoptic, was also on the panel and she stressed the contrast between the two companies’ strategies. While CityFibre is a wholesaler, Hyperoptic both builds and sells its fibre connectivity. Perhaps as a consequence of their differing philosophies, Tobak didn’t seem very supportive of the call for consolidation.

Hamlin also took the opportunity to criticise BT for only using Openreach fibre, even though there are many areas that CityFibre covers and Openreach doesn’t. He seemed to be trying to pressure BT into using CityFibre as a fibre wholesaler, perhaps acutely aware of the presence of BT CTO Howard Watson, who had remained in the audience after his earlier on-stage interview.

It’s not clear exactly what CityFibre has in mind when it comes to UK altnet consolidation. Has it got hold of another pile of cash, this time earmarked for M&A. Or perhaps Hamlin was trying to catch the attention of Nexfibre and/or VMO2 with a few to joining forces to take on Openreach? The UK fibre market does seem ripe for consolidation, but capital markets aren’t what they were when interest rates were almost zero, so it will take a brave investor to embark on large M&A over the next year or so.

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