UK ISP Zen Internet Set to Invest £4m into Superfast Broadband Upgrade

The boss of Zen Internet, Richard Tang, has said that the ISP expects a boom in demand for superfast broadband (FTTC/P) services over the coming years and plans to invest £4 million on a related network upgrade during 2013. Tang suggests that the effort could deliver a huge surge in its revenues.

According to Tang, Zen saw revenues rise to £45.6m for the year to 30th September 2012 (up from £43.1m in 2011) and it’s now aiming to break the £50m milestone. At the same time the ISPs pre-tax profits grew from £1m to £1.1m, which was partly tempered by a £20m spend on their new data centre at Sandbrook Park in Rochdale (Greater Manchester).

At present the latest 80Mbps capable FTTC and 330Mbps FTTP internet access technologies have already passed 13 million UK homes and businesses (over 40% of the country), although this will rise to 66% by 2015 (likely to hit around 90% by 2015/17 through public funding from BDUK). Tang anticipates that, within the next five years, this could fuel a surge in revenue to £100m but only if the expected demand materialises.

Richard Tang, Zen’s Managing Director, said:

“We are investing in our network to make sure we are ready and trying to let existing customers in areas already covered by it know that it is here. The challenge will be providing a service that is 10 times faster, which means a lot of our network connections need upgrading, which is what we will be investing in this year.”

The Manchester Evening News similarly notes that Zen currently has a workforce of around 425 staff and it expects to grow this figure by a further 25 over the coming year. Interestingly 70% of its revenues come from broadband (down from 90% five years ago) and 30% are now due to other services like phone lines and web design/hosting etc.

Zen has set itself a very challenging target and they’ll need to fight tooth and nail to win customers away from the established giants, although the ISP has historically always focused more on enticing home workers, businesses and those whom seek a generally higher level of service quality and support; the type of customer that is prepared to pay a little extra.