Brsk Secure £156m Debt Funding Boost for UK Full Fibre Rollout
Broadband ISP and network operator Brsk, which has so far built their own gigabit-capable Fibre-to-the-Premises (FTTP) network to cover 266,000 UK premises – mostly around the Midlands (rollout plan), has today secured an “additional” £156m debt investment from funds managed by existing investor Ares.
The operator, which in 2022 secured a funding boost of “up to” £178m from the same source (here), tends to focus its efforts on parts of Greater Manchester, Lancashire, West Yorkshire and the West Midlands in England. Brsk holds a long-term aim of passing 1 million homes by 2026 and some of their locations include Cottingley, Keighley and Bingley, Clayton, Allerton & Sandy Lane, Bradford, Accrington and many more.
Just to be clear. The funding – from funds managed by Ares Management Corporation’s (“Ares”) Infrastructure Debt strategy – has been upsized from an initial £103m commitment and now totals £259 million. The financing will support brsk’s growth and “enable their [FTTP] network to reach the million-homes mark by 2026“.
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The news also states that their network now covers approximately 250,000 Ready for Service (RFS) homes and is home to 14,000 customer connections. The premises passed count is a bit down from the 266,000 reported in the recent Neos Network news (here), which we assume is either down to rounding, a possible exclusion of business premises (they only mention “homes“) or because all the 266k weren’t yet RFS at the time of that news.
Brsk was founded by Giorgio Iovino & Ian Kock in 2020, both founding members of Vumatel, now the largest fibre network in South Africa. Together with support from equity partner Advencap, they are a team with plenty of experience in large scale fibre deployments. Brsk was supported in today’s funding deal by Sullivan & Cromwell LLP as legal advisor, while Ares was supported by Baker Botts as legal advisor.
Giorgio Iovino, co-founder of Brsk, said:
“With support from Ares, our network has grown almost fivefold, we couldn’t be happier working with like-minded financing partners to make it possible. Securing this funding is a significant milestone in clearing the runway for us to take full fibre broadband to 1 million homes.”
James Fox, Managing Director of Infrastructure Debt at Ares, said:
“We are delighted by the opportunity to continue to transact with Brsk and support them on their next phase of growth. We have been pleased with the delivery of their plan since our initial investment and look forward to working with Giorgio and the team as they look to realise their goal of delivering fibre broadband to 1 million homes.”
Standard prices from brsk typically start from £25 per month for an unlimited 100Mbps symmetric speed package on a 24-month term (inc. a free installation and router), which rises to £45 for their top 900Mbps package (they’re currently selling it for just £30 until the end of this month!).
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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5.2% take up rate so far.
Ouch.
Indeed. That’s appalling. They must have made a very good case to their funders to get further investment. And know something no-one else in the industry does.
That, or the public RFS figure is, err, imaginary.
It takes a lot to get people to change, I know I am one of those people who did not want to change. I did not see the need to change, it was only cost that got me to change to FTTP.
What they need to do is get people out there talking to the public.
I wish them well, anything to stop the dominance of openreach.
Their network is new, most people are within 2 year contracts they can’t get out of. So it’s not like that figure is where they’re heading, you need to know what the take up rate of their older cohorts is. If the homes passed 2 years ago are at 5% that’s an issue but I’d guess those are around 15%-20% based on how quickly they’re building, and that’s a great investment case
@Ben, you are spot on, in that some people still have a contract and I think this is why providers on the Openreach network are pushing people to longer contracts as they are worried about the Alt nets taking customers. 24 months is a long time in my opinion to be held in a contract, certainly with the increase in prices we get part way though the contracts, twice in a 24-month one. I never really liked 18 months, but better than 24.
i would love to know how many customers Zzoomm have here, I do mention it to people if they are saying about
their contracts ending, the problem is, as I have said before, getting people to change to FTTp as they feel they have no need for it
@Ben
You’ve made that up.
You’ve no idea how many people are still within a contract or indeed the length of that contract.
@Oggy, well the big providers are using 24 month contracts as standard (BT, Virgin, Talk Talk) so it’s fair to assume most people in contract are within that 24 months isn’t it? Ofcom estimates around 25% of people are no longer in contract (which aligns with the trend over recent years). What is it exactly that you think I have made up?
@Ben
Everything in your post is complete conjecture.
The only thing we do know is that for the RFS properties they claim to have very few have taken up their service.
In the current UK telecoms market, it’s a very bold lender willing to trust their money to an altnet. I note that the debt is “managed” by Ares. You have to hope that the people whose money this was actually intended it to be put into high risk ventures.
That is the risk they take, lots of things are risky these days to put money into.
Equity investors know the risks they take. The point of debt is that the most you get back is the agreed interest, and equity investors take the pain first if things go pear shaped. In return equity investors would enjoy unlimited upside if it all comes up smelling of roses. If it does go pear shaped and the equity investors lose everything, then all the further losses come from the company’s creditors (lenders).
So my question is who actually provided the cash as a loan? The name Areas Infrastructure Debt Strategy implies that (1) they’re managing other people’s money, and (2) the people putting money possible think its going into safe, heavily regulated infrastructure like water, electricity, gas lending. Infrastructure by convention is big, heavy fixed assets for which there’s an enduring need, where there’s little competition but offset by heavy regulation. Not at all like altnets.
So taking a step back, BRSK’s last published accounts were up to March 2022, and were “exemption” accounts meaning they are unaudited and contain virtually no useful information. If somebody promised you (say) 12% interest if you lend many tens of millions to a loss making, recently established company with less than 50 employees, where there’s no good public information, and operating in a sector that’s seen a rising number of restructurings and insolvencies, then would you say yes?