£21m EU Investment Boosts Hyperoptic’s UK 1Gbps Broadband Roll-out

Independent ISP Hyperoptic, which is currently rolling out their own 1Gbps (Gigabit per second) Fibre-to-the-Premise (FTTP/B) broadband network to around 500,000 homes in 20 cities across the United Kingdom, has secured a huge £21m loan from the European Investment Bank.

Apparently the new 8-year EIB investment represents the “largest ever dedicated backing for an Internet network investment” in the United Kingdom and indeed it’s a shade higher than the loan that Gigaclear similarly secured from the same source earlier this year (here).

The new funding adds to existing investment from Quantum Strategic Partners Ltd. (Quantum), which is a private investment fund managed by Soros Fund Management LLC that put £50 million into the ISP back in 2013 (here). As a result Hyperoptic has so far secured a total investment of more than £75 million.

The ISP has used this investment to expand their network, where they generally focus upon covering big apartment (Multi-Dwelling-Units) or office blocks in urban areas. At present we believe that Hyperoptic’s network covers around 200,000 UK premises (we’re still waiting for a concrete figure) and recently we were told that their long-held aspiration of reaching 500,000 by 2018 was still intact (here).

In keeping with the above, today’s news states that the “EIB backed network expansion seeks to reach more than 300,000 homes in the next 3 years“, with the goal still being to cover “half-a-million homes in cities across the UK“. The official announcement adds that the ISP has been “growing its network reach by over 100% per year in the past few years and will continue its current pace of growth within existing cities and expanding by opening new ones.”

Dana Tobak, CEO of Hyperoptic, said:

“Hyperoptic is excited by the European Investment Bank’s investment, which will further fuel our roll out and addressable market expansion. The confidence of both EIB and Soros Fund Management LLC supports the importance of FTTP in providing a boost to the UK’s digital infrastructure and economy.”

Jonathan Taylor, EIB Vice President, said:

“The European Investment Bank is pleased to support Hyperoptic’s roll-out of super-fast broadband in cities across the UK. This exciting new initiative will transform economic activity, healthcare, education and access to key services and represents the EIB’s first targeted support to address slow communications in UK.”

Apparently the EIB loan to Hyperoptic is supported by ‘InnovFin – EU Finance for Innovators’, MidCap Growth Finance with the financial backing of the European Union under Horizon 2020 Financial Instruments.

Over the last 5 years the EIB has provided nearly €13 billion to improve broadband and telecommunications across Europe. The EIB itself is directly owned by the 28 European Union member states, including a 16% share held by the UK government.

Meanwhile Hyperoptic is continuing to roll-out their ultrafast service to homes and businesses in parts of London, Birmingham, Glasgow, Cardiff, Bristol, Reading, Manchester, Leeds, Liverpool, Sheffield, Birmingham, Newcastle and Brighton. On top of that they’re also beginning work to roll-out in Portsmouth, Watford, Leicester, Southampton, Slough, Edinburgh and Woking.

The news rounds up an otherwise excellent month for Hyperoptic, which recently picked up the “Best Superfast Broadband” achievement at the annual 2016 ISPA Awards (here). The ISP has done well by focusing most of its efforts upon catering for the buildings and urban areas that BT has often left neglected.

However it should be said that Openreach (BT) are now responding with their own commercial plan to roll-out an FTTP service to 2 million premises by 2020 (here). Mind you BT’s 330Mbps FTTP often works out as being more expensive for consumers, although packages / ISP choices do vary and we’ve yet to see how their prices may change with the forthcoming 500Mbps and 1Gbps tiers. Not forgetting that Virgin Media are also doing 1 million or so FTTP lines (here) and they like urban areas too.