CityFibre has announced another big £300m investment boost to help support the expansion of their gigabit-capable Fibre-to-the-Premises (FTTP) broadband ISP network. The new funding has come from the Abu Dhabi government’s Mubadala investment fund, which has already put £500m into the operator.
At present the operator’s £4bn investment programme has already enabled their “full fibre” network to cover 1 million UK premises in predominantly urban cities and towns. After that they’re aiming to have 8 million premises “substantially completed” – across over 285 cities, towns and villages (c.30% of the UK) – by the end of 2025 (here).
All of this is being supported by major investments from several key funds, including the West Street Infrastructure Fund (Goldman Sachs), the Antin Infrastructure Fund, Interogo Holdings and Mubadala. The latter two are recent additions, after they both took a combined stake in the business worth £825m last September 2021 (here) – £500m of that came from Mubadala alone.
In addition, CityFibre also have an ambition to compete for rural deployment contracts under the Government’s £5bn Project Gigabit scheme, which is an area they’ve already trialled (here). In theory, the operator could use this to expand their coverage ambitions to reach an additional 1-2 million premises (beyond the existing target), but it remains to be seen how successful they are as other major players will also be bidding (BT, VMO2 etc.).
However, all of this requires money and, luckily, CityFibre has so far proven to be quite adept at attracting the necessary investment. Indeed, one existing investor, Mubadala, is so confident in the operator’s progress that they have invested another £300m. On top of that, we’re also expecting a separate deal to help the operator refinance its debt.
Combined, the recent investments now bring the total raised by CityFibre in the last six months alone to £1.425bn, which is one of the largest ever financing deals for UK Full Fibre deployment.
Greg Mesch, CEO of CityFibre, said:
“Mubadala’s confidence in our business is testament to our growing momentum and progress. The need and appetite for carrier-neutral wholesale network competition at scale is clear, and CityFibre continues to demonstrate the benefits as a driver of wider investment, improved services and better value. With Mubadala’s continued support, we are well funded to deliver the UK’s finest Full Fibre network and help to level-up the UK.”
Admittedly, it will still take several years for CF to truly build itself into being the country’s third major infrastructure competitor after Openreach (BT) and Virgin Media (VMO2), both of which have major FTTP expansion and upgrade plans of their own. For example, Openreach aim to cover 25 million UK premises by December 2026 and VMO2 could potentially reach just a little shy of that by around 2027/28 (here).
We should point out that there are a lot of other significant alternative network (AltNet) providers in the UK market and some of them are already building at scale, such as Hyperoptic, CommunityFibre, G.Network, Gigaclear, KCOM and others (Summary of UK FTTP Build Progress).
In the future, we expect to see a fair bit of market consolidation, since dense urban areas would struggle to support more than 3-4 fixed gigabit-capable operators overbuilding each other and that model becomes even more strained in smaller towns.
UPDATE 7:02am
The official press release came out this morning, so we’ve updated the article to reflect that and add a comment.
Have Cityfibre ever explained why they completed avoid Wales in any expansion plans?
*completely
They bought the old K-com/Torch network, which they use as their core, and build off of that. My guess is it doesn’t go into Wales.
They investment for Halifax flopped was supposed to start January until sub contractors went
Have CityFibre *actually* completed anything yet?
Take the money. Don’t mention issues with human rights in Abu Dhabi.
Building on the exact same footprint as openreach, so cabinets that never got FTTC, now don’t get Openreach FTTP nor CityFibre FTTP. It’s the not spots that matter, those with sub 5Mbps, those with persistent faults, those with grass verges and driveways permanently dug up for ‘fault finding’ but no one really gives a monkeys at openreach. The area, constituency, city and region is officially something like ‘98.7% superfast’ so that’s alright then.
I’m loving them in Suffolk get gig up and down for half I was paying virgin for 500/50
Cityfibre. Sponsored by
https://en.wikipedia.org/wiki/Human_rights_in_the_United_Arab_Emirates