Quick Summary of UK FTTP Broadband Builder Zzoomm’s Results
Oxfordshire-based full fibre network builder and UK ISP Zzoomm has today published a summary of their annual financial results, which among other things reveals that their FTTP broadband network now covers (RFS) over 140,000 properties (2022: 38,000) and they’re home to over 12,000 (2022 3,700) customers.
The operator, which aims to cover 1 million premises across 85 UK towns by the end of 2025, is currently still being fuelled by an equity investment of £100m from Oaktree Capital (here) and a £100m debt facility via an international banking consortium (here). But like a fair few other alternative networks (AltNets), they also recently had to deal with a few job losses (here).
However, despite the current market pressures, the operator remains committed to its coverage targets and plans to ramp up their build. According to the provider’s CEO, Matthew Hare, Zzoomm’s “rate of development is accelerating with our subscription revenue stream rapidly growing. One of our latest builds completed in early 2023 is already seeing our greatest customer demand.”
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“We are ramping up our roll out programme and will commence building in more market towns and other urban communities. We expect to release more properties ‘ready for service’ in 2023 than all the prior three years combined. Our focus will be to leverage the opportunity to target smaller but higher potential locations where we can build and drive higher rates of customer penetration,” added Matthew.
Highlights from Zzoomm’s Results for 2022
➤ Operating across 21 market towns and small urban communities
➤ During 2022 commenced network construction in: Great Ayton, Northwich, South Elmsall, Stokesley, Winsford, Congleton and Wombourne plus settlements surrounding on-going builds at Cannock, Crewe, Hereford and Northallerton
➤ Now completed build of networks in Crowthorne, Henley-on-Thames, Sandhurst, Thirsk & Easingwold
➤ Properties ready for service rapidly growing
· End of December 2022, circa 94,000 properties (2021: 10,000) ready for service with circa 6,300 (2022: 1,400 customers) contracted
· End May 2023, over 140,000 properties (2022: 38,000) ready for service and over 12,000 (2022 3,700) customers contracted
➤ Standout challenger brand, achieving a Trustpilot rating of “Excellent”, continues to be synonymous with excellent customer focus, transparency, quality of service and product reliability as well as connection speeds innovation
➤ Revenue jumped £1.2m (2020: £0.4m) as recurring subscription revenue began to pick up from customers across the country
➤ Operating loss £12.3m (2020: loss £8.15m) reflecting continued investment in accelerating the growth of the business
➤ Building continued and increased to the end of 2022; £90.2m had been spent on network build as at 31 December 2022 (2021: £25.5m as at 31 December 2021). This is in line with the Board’s roll out plans.
➤ At the end of the year, the Group cash balance was £18.3m (31 Dec 21: £6.5m).
➤ Customer penetration rates growing – established networks now circa 30%
➤ Continued to draw funding from Oaktree Capital Management and debt facility from ING, Hamburg Commercial Bank and Kommunalkredit secured in 2022
➤ May 2023 – roll out to three new market towns announced, construction already underway. Now building in 12 market towns
Customers who take the residential service typically pay from £29.95 per month for an unlimited 150Mbps (symmetric speed) package on a 12-month term with an included router, which goes up to just £64.95 if you want their top 2Gbps tier (or £39.95 for 900Mbps+). Most of their packages also discount the price for the first 3 months of service.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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With a conversion rate at April of 8.1% of RTS properties, and capex per RTS property of £959 as at end 2022 (£90.2m/94k), they’re going to have to a whole lot better to survive. Even allowing the inevitable build to sign up lag, those numbers don’t look like the makings of a great business. If they double the conversion rate, then effective capex per customer will still be around £6k.
I’d like to be optimistic, but looking at numbers like that it’s difficult.
They must be pretty close to the end of the build here. one of the problem is getting people off FTTC, if they are happy with the speed they have then they will no need to change.
100%. This is where the “market towns” strategy (not unique to Zzoomm by any means) falls apart. You just won’t get the necessary penetration where there’s lots of FTTC. And the capex per property to cover just or mostly the ADSL-only properties – where you will get sensible penetration – is eyewateringly high.
@Mikep, Openreach is having the same problem getting people to change, but they do have an advantage. Zzoomm don’t seem to be doing too badly, the installers that done mine said that they are busy and had a load to do that day.
@Ad47uk which router did Zzoomm give you? For some reason they want to swap my Zyxel AX7501-B0 out for the icotera i4882
The network is pretty new. Given most people are in 2 year contracts, I’d expect maturity doesn’t happen for 4/5 years. Likely this network is under 1 year old on average so I reckon it’s on track for 30% or so (assuming take up slows down)
It’s last published accounts at companies house show a large loss. Revenues are increasing but so are costs
Most alt nets seem to fail on marketing. They need to get into a town or village with FTTP first sand need to sign up subscribers fast fast. If they do not other alt nets and Openreach will just take most of the subscribers leaving them with the crumbs
From the public accounts it is difficult to work out the breakeven point but I suspect they will need at least 30% and that will be tough to achieve even wit no competition
Another problem now is with the BOE rate increasing fast the cost of servicing the debt will be going up fast