ISP Upp Remain Optimistic Over Sale of UK Full Fibre Network

The CEO of network operator Upp, Drew Ritchie, which is deploying a new Fibre-to-the-Premises (FTTP) broadband network in the East of England, has told ISPreview.co.uk that discussions over the forced sale of their business by the Government are “progressing well” and that in the meantime their “build is continuing at pace.”

Just to recap. Upp is being backed by LetterOne (L1T FM Holdings UK) and a committed investment of around £1bn. The goal of their FTTP build was to cover 1 million premises in the East of England by 2025 (here), including a short-term target of reaching 50 towns (c.300,000 homes) in counties like Norfolk and Lincolnshire by the end of 2022 (so far we’ve only seen them go live in around 11 towns).

However, all of this was thrown into doubt in December 2022, after the Government ordered LetterOne – an investment firm that previously received significant backing from several prominent and now sanctioned Russians – to sell its entire stake in Upp in order to “prevent, remedy, or mitigate the risk to national security” (here).

In response, L1 said they “believe that L1 ownership of Upp is not a threat to national security in any way” and pointed out that “L1 is not sanctioned and has taken fast, decisive action to put in place strong measures to distance L1 from its sanctioned shareholders. They have no role in L1, no access to premises, infrastructure, people and funds or benefits of any description.”

Nevertheless, the situation left Upp itself in a difficult predicament and, as if that wasn’t bad enough, one of their key civil engineering contractors – Light Source – has also just entered administration (here). The situation at Light Source impacts various other network builders, but clearly the timing couldn’t have been worse for Upp. But despite this, the ISP itself remains, perhaps surprisingly, upbeat.

Drew Ritchie, CEO of Upp, told ISPreview:

“Upp enjoyed its best ever month of sales in January, breaking all previous records. Our current promotion ‘Pay £0 for 3 months’ is proving enormously popular with customers. Discussions regarding the sale of the business are progressing well. In the meantime, it is very much business as usual, and our build is continuing at pace.”

The suggestion of some positive progress in related discussions is good news, but we can’t ignore that all of this is happening in an increasingly turbulent market for alternative networks. But that’s before we even consider the recent disruption to a key contractor, which certainly won’t help.

Suffice to say, it’s becoming increasingly difficult to see how Upp’s original build target will survive under a new owner, assuming they do find a buyer who is willing to take on more than just their current network assets. We also still have no idea how many premises they’ve actually managed to cover since the build phase started.