CityFibre UK Agrees Significant Metro Fibre Broadband Investment with Citigroup

CityFibre Holdings, a provider of fibre optic broadband infrastructure (FTTH) for business, public sector and consumer purposes, has managed to secured its “first” multi million pound investment from Citigroup. The success forms a vital part of the operators existing plan to invest up to £500 million into the deployment of ultrafast broadband services for local authorities, 50,000 businesses and 1 Million homes in the UK (original news).

The new financing facility was apparently secured with CityFibre’s “long term contracted customer revenues” and Citigroup has also agreed to assist with the operators future financing requirements.

The move follows last year’s appointment of another investment bank, Macquarie Capital, by CityFibre as the lead advisor for its efforts to garner new capital and manage their existing corporate finance.

Greg Mesch, CityFibre’s CEO, said:

“I am delighted to announce the provision of a facility by such a prestigious financial institution as Citi. They understand the vital role of fibre infrastructure and recognise the unprecedented business opportunity afforded by acute underinvestment in the UK. CityFibre is perfectly poised to take full advantage of this unmet demand and looks forward to working with Citi to realise our vision.“

Michael Lavelle, Head of EMEA Capital Markets at Citigroup, added:

“We are pleased to offer CityFibre this facility as we believe that CityFibre is well-placed to develop its alternative fibre infrastructure offering to serve UK homes and businesses. We look forward to working with CityFibre in its future development.”

CityFibre’s primary goal is to build more “valuable” city wide metro fibre and 100Mbps+ capable Fibre-to-the-Premises ( FTTP ) networks, such as its related services in the UK city of York. The operators next rollout, which will be based around their “unique open access wholesale model“, of metro fibre is expected to commence during this Spring 2012.

Sadly the precise details of their next deployment are not yet known, although CityFibre did state that it would continue to focus on “the UK’s second tier cities“. Apparently this includes cities that suffer from a “lack of critical fibre infrastructure“. CityFibre claims to have already received “high level” interest in their service and they now have enough cash to respond.

This is not to be confused with their domestic FTTH platform, like the one they have in Bournemouth (allegedly serves up to 24,000 homes), although the new metro fibre networks could, if so desired, still be used for the same sort of purpose.