Cityfibre UK to Appoint New Chairman Steve Holliday UPDATED

The Goldman Sachs backed Cityfibre, which is currently investing £2.5bn in order to deploy a 1Gbps FTTH broadband ISP network to 5 million UK premises by the end of 2025 (here), will today announce the appointment of former National Grid boss, Steve Holliday, as its new Chairman.

The company was last year acquired for £537.8m cash by Bidco and promptly went private (here). The Bidco group was backed by Antin Infrastructure Partners and West Street Infrastructure Partners, which is a fund managed by Goldman Sachs. As such today’s move, once confirmed, is perhaps a predictable one since major business acquisitions are often followed by a significant restructuring of company management.

Steve Holliday has the experience of running a major infrastructure business as he recently spent several years (2007 to 2016) as the CEO of National Grid. On top of that he has also acted as the Non Executive Director of Marks and Spencer, as well as an Executive Director of British Borneo Oil & Gas and he has served on the board of the Department of the Environment, Food and Rural Affairs (DEFRA), among other things.

Greg Mesch, CEO at CityFibre, said:

“The Government’s target for national full fibre coverage by 2025 is an ambitious ask but CityFibre is ready to play its part, connecting more than 20% of the market in that time. Full fibre network infrastructure is fast becoming the next essential utility, underpinning the UK’s competitiveness on a world stage.

As we continue to scale at pace, Steve is uniquely positioned to support us, providing deep insight into the challenges of delivering national infrastructure programmes and bringing his extensive experience of operating a national utility to bear.”

Steve Holliday said:

“The UK is undergoing a digital infrastructure revolution with full fibre roll-out well underway. As we have seen in other utility industries, the emergence of new players has greatly improved outcomes for consumers and is the key catalyst for a more vibrant and innovative market.

CityFibre is perfectly positioned to establish itself as a key contributor to national full fibre coverage and I look forward to working with the team to successfully manage and deploy this exciting and complex project.”

Today the operator has become a serious competitor for established players like Openreach (BT) and Virgin Media, which started in the Dark Fibre market across c.50 UK towns and cities and is now branching out alongside Vodafone to hopefully reach millions of homes.

As it stands Cityfibre is still in the ramping up phase of their early Fibre-to-the-Home (FTTH) deployments – across 12 initial locations – and has so far only managed to cover nearly 100,000 premises since late 2018, although they’ll need to build a lot faster than that in order to reach their first target of 1 million premises by the end of 2021.

Most recently Cityfibre has also been linked with discussions around TalkTalk’s sibling FibreNation company (here), which could see Cityfibre either acquiring a major stake in the new business or potentially gobbling all of it and their nearly completed FTTH network in York. However it remains to be seen whether that progresses, not least since FibreNation’s parent has somewhat of a reputation for driving a hard bargain.

Meanwhile Cityfibre faces a market that is becoming much more aggressively competitive, not least with Openreach now targeting their rival Gigabit FTTP broadband network for 15 million UK premises by around 2025 (here). On top of that Virgin Media are seemingly seeking to branch out into new areas with similar technology by establishing a new company under Project Hermes (here).

Lest we also forget Hyperoptic’s major FTTB/P rollout plans for several million premises (here) and the veritable swarm of smaller alternative network ISPs that seem to be entering the market, although only a few of those have managed to actually build a full fibre network of any modest scale. Suffice to say that Cityfibre are better placed than most in this market but it won’t be an easy climb, it rarely ever is.

UPDATE 08:58am

Correction to our earlier summary of the news reports. The CEO of Cityfibre, Greg Mesch, is NOT being changed for Steve Holliday. The official confirmation says Steve has been appointed Chairman.