CityFibre UK Launch First TV Ad Campaign for Full Fibre Network UPDATE
CityFibre, which aims to cover up to 8 million UK premises (funded by c.£2.4bn in equity and c.£4.9bn debt) with their full fibre broadband ISP network by the end of 2025 (here), has today launched their first ever TV advertising campaign – entitled: “Does your broadband suck?“. The campaign is designed to encourage consumers to upgrade.
The announcement notes that the operator has so far covered a total of 2.6 million UK premises, which falls to 2.3 million for those that are considered live and Ready for Service (RFS) by one of their 30 or so broadband ISPs. But if correct, this may reflect a slowing of build growth from the 2.2m RFS reported in January 2023.
The limited coverage is something that CityFibre has had to factor into their first TV advertising spot, which will run on Sky AdSmart and YouTube, targeted to their existing coverage areas. The TV advert will complement a series of content that will be delivered via social, digital audio and OOH platforms in geotargeted areas across the UK where their network is available.
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Dan Ramsay, Chief Marketing Officer at CityFibre, said: “For too long we’ve put up with broadband that has sucked the life out of using the internet. With CityFibre’s full fibre network, it’s time to uncork the potential of what better connectivity can do for all of us. Acting as a launchpad, our network will completely transform the way we work, how we consume media, and keep us better connected with friends and family.”
UPDATE 31st March 2023 @ 9am
After some checking, CityFibre has kindly clarified that 2.6 million is their overall premises passed figure, while the total for RFS premises is actually 2.3 million. This is interestingly because 2.6m is only c.100,000 premises more than the 2.5 million figure they put out in late January 2023. Back in January they were building at a much faster rate (adding around 100k per month), but judging by the new figures their pace of build may have halved since then (closer to 50k per month).
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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how many consumers are going to understand that they’re not the ISP? two brands is confusing
I don’t get it? Sinking in debt and bleeding money, now their spending a huge amount of money on TV advertising when most consumers won’t understand that they’re not an ISP.
Personally I think the money would have been better spent by reducing their prices to make their network more attractive and increase take up.
Every operator in the build phase of life is bleeding money, since payback on new FTTP is 10-15 years. But if they were to divert the relative small amount of money they’ve spent on this TV campaign and use it to cut wholesale prices, then the impact would be utterly insignificant (not even enough for ISPs to bother passing it on).
Problem is that a payback time of 10-15 years indicates that it’ll never clear any sane commercial investment criteria, with the proviso that things change entirely if a greater fool can be found to buy the asset. But that isn’t a good sort of change for anybody else.
Andrew G what are you on about. 10-15y RoI is awesomely fast, that’s like 7-10%/yr.
CF pricing already beats rivals, don’t think they need to push that aspect.
No matter how you want to talk it up, it’s pretty obvious Cityfibre is not a happy ship to be aboard at the moment.
First the employees are told how well everything is going, then they announce hundreds of redundancies.
Then just as the ones told they are keeping their jobs are breathing a sigh of relief, they discover their CEO is off having talks about selling the company to a rival.
Rich: “Andrew G what are you on about. 10-15y RoI is awesomely fast, that’s like 7-10%/yr.”
At the ten year mark it’s just about viable, problem is I don’t believe any altnet is anywhere near hitting a ten year payback, and the more substantive problem is that any commercial investment for an asset based startup has a cost of capital that’s about 11-15%. Even big, well funded, stable companies like VM have a CoC or around 9%. A 7-10% return is value destroying, meaning that the shareholders equity steadily declines. You can only keep doing that whilst investors pour in more cash, and that increases the capital employed and makes the value destruction problem worse.
The initial investors behind altnets know that the initial business plan loses money, they’re confident that they can sell out for more than they put in. Works for them, but then the acquisition premium gets added to the altnet balance sheet, and customer prices have to go up by a lot to cover that. Or, given that Openreach and VM set the market price, more likely the secondary altnet investors plan on a further buyout, setting the ship firmly on a course for the rocks.
Investment in the entire altnet sector is by people who hope to take advantage of an expected feeding frenzy, and that’s creating an asset price bubble. As soon as secondary, tertiary and institutional investors start throwing their money into this too-good-to-be-true opportunity (as is starting to happen) then the bubble is well formed and has to burst. Best recent example was the US dot com bubble, where everybody thought that there boring old economic maths no longer applied to tech investments, that ended badly with around $5 trillion of losses, heavily biased towards banks, institutional investors and the secondary private equity investors. You could throw in everything from CDOs (the cause of the 2008 financial crisis), the Japanese property & stock crash, Wall Street 1929, Railway Mania, South Sea Bubble, or the Tulip mania.
Maybe they should just advertise in major urban areas and explicitly ignore any surrounding suburban or rural areas? Just a thought.
Hence, the geo-targetting.
I really feel sorry for Cityfibre’s sales/marketing guys, flogging a dead horse, desperately trying to increase take up and start making a profit.
Meanwhile in the background, their investors are ready to pull the plug and sell to Virgin Media or anyone else.
Your axe must be nearly worn out by now
@Anon Maybe he/she has an axe to grind but I’m afraid it’s true.
Utter madness! The network builder spending money on advertising? It should be the ISP’s that are doing the advertising.
That’s true. Clearly CF believe more marketing is needed, and that will be to improve uptake ratios. Unfortunately, by doing their own advertising, CF are diluting what marketing message there is from ISPs using their network, and it all just becomes more “fibre noise” to an audience who clearly aren’t very engaged in the first place, and probably can’t differentiate between CF, Openreach, VM, other altnets, don’t understand the difference between wholesalers and ISP, as well as not knowing the difference between FTTC, FTTP and HFC. Like my mum. An interesting thought is that around 25% of all households are where the “household reference person” is over 65, and I’d guess the need and the conversion rate is really low and really difficult to shift for those properties. Maybe the core problem is not the marketing, but that too many people at all ages don’t see the need for better speeds than FTTC.
If it is a marketing inadequacy issue, CF could be better off doing an analysis of the marketing efforts by their existing ISPs, identifying the weaknesses and either offering free advisory to those ISPs on how to improve their marketing and conversion rates, or forming partnerships whereby CF will contribute to the ISP’s marketing so long as it meets CF criteria on targeting and outcomes. To avoid damaging commercial relationships any contribution arrangement would need to be offered via an open opportunity for all CF ISPs to bid for available contributions, subject to CF’s rules.
@Andrew G… I agree completely, the majority of UK households simply aren’t ready for FTTP right now.
Not every house contains people wanting to stream TV or play online games requiring high speed/low latency connections.
I guess most Altnets planned on every house they (and Openreach) passed would be signing up for FTTP and they would have a healthy percentage take up.
As we’re seeing now, this is simply not the case and the flawed business plans are beginning to be exposed.
I feel really sorry for the guys at Cityfibre, it’s obvious they’ve worked hard and were promised great things, repeatedly told everything’s going great, then came the redundancies shortly followed by the CEO allowing it be known that the business is up for sale.
I’m sure they’ll be plenty of Cityfibre employees sending out their CV’s in an effort to beat the rush.
Reminds me of Gnetworks putting up London bus advertisements before even passing any homes
That advert sucks in more ways than one. I can see how they’ve tried to make it humorous, but it’s a bit lifeless and dull, apart from the coloured slushy. Wouldn’t they have been better off going with something futuristic and inspiring, something to stimulate the imagination maybe?
I bet Cityfibre’s advert doesn’t mention the attempts they’ve made to try and keep the broadband prices artificially inflated, trying to stop Openreach reducing their prices.
Oh, is that their advert, I thought it was an advert for a soft drink!
I thought I’d be watching something ‘high tech’ rather than a guy getting drenched in front juice.
It doesn’t really explain to the normal person what the difference between “fibre” and “full fibre” is
Doesn’t say much at all really.
Cityfibre have wasted a good opportunity.
Obviously very cheap to make and it shows, shame.
Paula, take out a few syllables and that’ll make a nice haiku!
Here’s my literary endeavour:
Altnet hopes are strong
Harsh winter comes
Few will thrive
Damn that was a terrible advert I wonder how much they paid
Hmmm, I was thinking the same, a bit cheap and naff.
Bit embarrassing to be honest.
Oh well, investor’s being spent to keep a few more people in business.
Those claiming they have wasted a lot of money on their advert. Have you actually seen it. Looking at it I would say it cost them about £50 to create.
You’ve obviously never hired a marketing agency before
@Mike Cityfibre have their own marketing department, they don’t need to hire one.
LOL, is this an April’s fool gag or are they really going to release that advert?