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The 4th Utility Get £25m to Fund UK FTTP Broadband Rollout

Wednesday, August 19th, 2020 (11:03 am) - Score 2,930
4th_utility_team

Greater Manchester-based UK ISP The 4th Utility has today secured a £25 million investment boost from DIF Capital Partners, which will be used to support the next phase of their 1Gbps capable Fibre-to-the-Premises (FTTP) broadband roll-out to residential properties (mostly new build developments).

The provider first began building their new network last year (here) and have been working closely with major property developers, such as the Fortis Group, Crest Nicholson, Taylor Wimpe and David Wilson Homes (part of the Barratt Group) among others. As you might have already guessed, they tend to focus more on large apartment blocks (MDUs) and commercial properties.

NOTE: Pictured – From left to right: Mark Cueto (Sales Director), Tony Hughes (CEO), Neil Marvell (DIF, Senior Director), Nicola Beamish (CFO), Jeremy Gray (CIO), Jimmy Acton (CTO).

At present the operator informs that they’ve already completed builds to cover 2,500 premises and the immediate plan is to complete their initial target of 10,000 by the end of 2020. Last year we were also informed that the ISP had a “pipeline of over 150,000 homes to deliver too in the next 5 years,” although they’ve now raised this target to 300,000 premises within the next 3 years (i.e. by around autumn 2023).

Connecting up large apartment blocks in urban and semi-urban areas tends to be noticeable cheaper than doing individual housing down streets (SDU). Due to this the new investment of £25m should be enough to take a big chunk out of that target (we’d guesstimate 100,000+ premises), but they’ll probably need more investment to hit 300,000.

Tony Hughes, CEO of 4th Utility, said:

“The partnership with DIF Capital Partners is a significant milestone for our business and gives us a fantastic platform to deliver ultrafast internet access to many more properties across the UK.

The team at DIF share our desire to invest in high-quality fibre infrastructure and our ambition is to use this funding to become one of the leading broadband providers in the UK, ensuring thousands of new customers can benefit from full fibre connectivity.”

Willem Jansonius, Head of DIF Capital Partners, said:

“We are pleased to bring our experience in digital infrastructure to support 4th Utility and their management team in delivering FTTP infrastructure investment to underserved properties in the UK.”

As usual the 4th Utility won’t have this market all to themselves as Cityfibre, Openreach (BT), Virgin Media, Hyperoptic, CommunityFibre and others are all playing in the same water. But for the now there’s enough space for everybody to play in different areas.

Customers typically pay from £35.99 per month for a symmetric speed 100Mbps broadband package and this goes up to £57.99 if you want their top 300Mbps home tier. Contract terms and activation fees tend to vary between developments, with some getting this for a 30-day term (one-off activation costs the same as the monthly fee) and others 12-months (free activation). A 4-hour SLA fix time is also included.

A corporate finance team at Deloitte, comprising partner Darren Boocock and directors Nick Carr and Dan Marchington, provided financial advice to 4th Utility, and introduced the business to DIF Capital Partners.

Leave a Comment
7 Responses
  1. Avatar ianh says:

    Its a bit pants for the residents as the developers are blatantly getting a cut of this….im sure they’d all much rather pick from any of the providers who use the openreach network. But the devs wont get anything other than a free install that way. Sad times.

    1. Mark Jackson Mark Jackson says:

      Depends on the agreement between ISP and developer, but usually the deployment of FTTH makes properties more attractive to buyers and so easier to sell (a revenue share isn’t common, instead providers offer to do the build at no or very little cost to the developer).

      What this does is give people the choice of FTTH, although Openreach’s copper usually still exists as a fall-back if you prefer slower speeds.

    2. Avatar FibreBubble says:

      Unlikely to be able to get any kind of service from anyone else as these development tie ups lock out other providers. Highly anti-competitive practice.

    3. Mark Jackson Mark Jackson says:

      Depends on the contract and site, but I agree that mini-monopolies where choice is artificially restricted by the developer, even when other networks may wish to build, is not a favourable outcome for consumers.

    4. Avatar Bob Iving says:

      It is very common for larger providers like Openreach and Virgin to offer £150-£180 per house to the developer. It’s in the form of “duct rebate” but really it’s a payment.

  2. Avatar Buggerlugz says:

    I honestly believe this is a Tory attempt to just make some money off the back of a dying technology for they’re mates. I don’t for one second believe they’re doing it for the good of new home owners.

    The future is 5G, but right now they can’t back pocket enough to make it worth they’re while so they are continuing to roll out tosh like this in an attempt to make our connectivity figures look better.

    1. Mark Jackson Mark Jackson says:

      Dying technology? You can’t do 5G without fibre and radio spectrum is a finite resource, whereas there’s a lot more capacity to be found in optical lines. Also, not sure what this has to do with “Tories”, it’s a private investment in a commercial ISP and the last time I checked all of the political parties supported a push for more full fibre.

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