Gigaclear Secure GBP24m to Expand Rural 5Gbps FTTP Broadband Rollout

UK ISP Gigaclear, which is rolling out an ultrafast 5Gbps capable Fibre-to-the-Premises (FTTP) broadband network to rural communities across the United Kingdom, has today announced yet another equity investment boost of £24m that will be used to help further expand their coverage.

So far Gigaclear, which owns and operates 60 rural fibre networks with 25 more under construction, claims to have delivered its network to a total of over 20,000 properties in Berkshire, Cambridgeshire, Essex, Gloucestershire, Kent, Leicestershire, Lincolnshire, Northamptonshire, Oxfordshire and Rutland.

The above coverage includes several Government (state aid) supported Broadband Delivery UK contracts (e.g. Gloucestershire [here], Essex [here] and Berkshire [here]) and they hope to reach approximately 40,000 premises by the end of 2016 (at this point they should have built around 130 small networks, each covering one or two villages).

Beyond all that Gigaclear also have commercial plans to reach another 30-40K premises (around 80,000 total out of a theoretical “addressable market” of 1.5 million UK premises), which will require more investment. The ISP has already managed to attract £48.6m and this was recently boosted by a €25m (£18m) loan from the European Investment Bank.

The good news is that the ISP has today announced a further investment boost of £24m, which is coming from investors such as Neil Woodford, Infracapital and other shareholders. Overall Gigaclear’s total valuation is now said to stand at about £115m.

Ed Clarke, Co-Founder and Director of Infracapital, said:

“We are delighted to continue our support for Gigaclear as it accelerates its growth rate and strengthens its presence in the market. Having successfully secured several BDUK contracts and completed this round of fund raising the business is well placed to deliver its 2016 roll out plans.”

Matthew Hare, CEO of Gigaclear, said:

“We are building to tens of thousands of potential new customers this year. The strong financial support of our shareholders lets us get on with the job of delivering Britain’s best future-proof broadband without delay.”

At present Gigaclear are taking a similar approach to Cityfibre and Hyperoptic, which means that they’re spending big on infrastructure development now, albeit in recognition of that fact that it could take a long time to recoup that investment. Gigaclear investors are not expecting to see a return until 2018, but it will take even longer to fully recoup everything.

However investors often seem able to see the long-term potential of fibre optic connectivity and Ofcom’s preliminary decision not to split Openreach from BT’s control means that there should continue to be a gap in the market for alternative network providers and this will grow.