Full Fibre Operator VX FIBER Pauses UK Rollout and Cuts Jobs
More bad news for alternative networks today. Swedish provider VXFIBER, which alongside subsidiary and ISP LilaConnect had recently been busy rolling out several new gigabit-capable Fibre-to-the-Premises (FTTP) broadband ISP networks in the UK, has confirmed to ISPreview that they’ve paused the rollout.
Until now the operator had been building their full fibre network across several UK areas, such as the Staffordshire cities and towns of Stoke-on-Trent (100,000 premises – here), Leek (11,750 premises – here), Cannock and Penkridge (here), as well as the Essex town of Colchester (8,000 premises – here), parts of London (3,000 premises via Prime Fibre), Haverhill in Suffolk (here), Crewe and Nantwich in Cheshire (here), and their projects in Bristol and Uttoxeter.
However, over the past few days we began to receive reports of redundancies occurring at VX FIBER’s division in the United Kingdom which, judging by the feedback on social media, seemed to be primarily impacting their engineering teams.
The operator has now confirmed to us that they’re “pausing further deployment to focus on commercialising the fibre already laid“, which explains why so many workers are facing redundancy. The tenative plan is to resume the build work at some point in 2024, but that may ultimately depend upon what “strategic options” (e.g. new investment, mergers etc.) they can find to help keep the funding taps fully open.
A spokesperson for VX FIBER said:
“We are refocusing VX Fiber’s UK business plan for 2023 on fibre operator deals and the commercialisation of existing networks, while looking at strategic options to take the business forward. We are pausing further deployment to focus on commercialising the fibre already laid. We plan to recommence fibre deployment in 2024.”
In recent weeks and months, a number of other full fibre operators have also been announcing job losses (e.g. CityFibre, Zzoomm, Lightspeed Broadband, VMO2, G.Network, Hyperoptic etc.), which often appears to reflect the pressures they’re all under in the current climate. Key issues tend to be rapidly rising costs (build, leases etc.), aggressive competition from rivals (e.g. overbuild) and the related need to secure a viable level of consumer take-up.
Such issues could potentially dampen the appetite of investors to keep the funding taps fully open, while finding fresh sources of investment in this market isn’t perhaps as easy as it once was. Situations like this tend to thus result in slower builds (i.e. forces the operator to focus on take-up, rather than new fibre) and that may in turn put pressure on jobs.
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 and Linkedin.
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Sad news, another Altnet following the same pattern, step by step.
So the pattern we’ve seen (as Cityfibre and others) is they stop or slow the build, lay off staff involved with the build, plough all resources into sales/marketing, advertising, tour bus, etc. in an effort to increase take up and start bringing in the money.
But what happens when that doesn’t work? What’s the next step?
Most likely, they’ll either find a new investor or need to seek a sale/consolidation with another operator.
Have they even managed to get that much Fibre in the ground ?
They’ve put a lot of fibre in Staffordshire, but judging from the facebook comments to their ads a lot of it is still dark 18+ months after deployment. In my area of Stoke it’s been live for nearly 2 years and the take up is anecdotally good – plenty of houses are sporting a VXFibre/LilaConnect box next to their ntl/Virginmedia one!
The problem is going to be when the investors realise increased take-up at the price the operators are having to charge is not going to make them money either.
Not sure why this story is being characterised as “more bad news for alternative networks”? As far as I can see the current conditions have impacted every company building fibre networks, including BT/Openreach. It’s an industry-wide issue. The pace of network build over the last year has been phenomenal – it is inevitable given the rising cost pressures that this pace slows, and attention shifts to increasing take-up rates. Private investment in alternative networks is strong and ongoing, as can be seen from several recent announcements of new funding. The strategy of opening up the market to alternative providers has been successful. Without that spur it is certain that BT Openreach would have continued to sit on its hands. Market consolidation is an inevitable consequence of this strategy, but that does not equate to a failure.
Because bad news is a way to control people, that is what the media does.
It is not good for the people who lose their jobs, I do feel for them, but it makes sense to sell what you have first. Openreach is having difficulty selling pure fibre in some places. In my road alone, there are, as far as I can see, two houses with Openreach fibre, 4 including mine with an alt network. Around 40 houses in my street. I know it is only one street, but I thought more people would have gone for Full fibre around here.
Depends how good you’re copper broadband was before fibre was deployed. Before I switched to BT/OR FTTP I was getting the full 80/20 megabits from FTTC and quite honestly that’s more than enough than enough for most people to stream Netflix so there’s little incentive to make the switch. The altnet that’s seems to have the best strategy is Gigaclear building in the villages where there is little competition and the copper network is usually quite poor and will get a quicker take up and will probably be a while until they get overbuilt, that’s if they get overbuilt at all. Also people on the whole once they’ve gone to FTTP probably ain’t going to have multiple fibre installations in their houses so whoever they go with first thay are likely to stick with.
The strategy of opening up the market to alternative network providers has at the most only been a mixed blessing. It certainly hasn’t resolved the digital divide, too much cherry picking.
I also noticed quite a few altnets are loosing customers to Openreach for the simple reason of not following through to the end with planned rollouts. E.g. LightSpeed Broadband in the East of England is one prime example for this, having deployed fibre along many roads, ducts, poles, in many places, often more than a year ago, and then simply not finishing the job. Meanwhile Openreach comes along, does its own quick rollout, and takes away potential new customers from the altnet. This is bad for altnet investors, and often preventable with a better management and business plan.
Scale is needed to tackle those areas. Need lots of cheap to build premises to offset them.
Altnets that don’t exercise discipline over their costs end up falling into strife. Bar a very few isolated areas they can’t spend 3, 4, 5 grand on a single premises routinely and those that do charge high retail prices. No good having it available if it’s prohibitively expensive.
Realistically Openreach or someone else with big time government support will build most of those properties, not private funding.
80% of the UK may order gigabit services, 52% via full fibre, and 10% of the households below USO speed in April aren’t as of May. It’s getting there.
The entire UK pretty much may purchase Starlink if it comes to it.
Another useless Britain with more bad news with more misery!
A big problem is the Local authorities not wanting alt nets being built in their area. Ultimately as they have to do more work and get out of their comfort zone. If people were honest I’m sure you would find that a lot of LA are very obstructive to works being completed and find any way possible to continuously stop the works. This therefore has a major impact financially right through the chain of contractors. There needs to be a government policy that is abided by the LA as the current situation hasn’t worked.
Some of them will claim to have no resources to sign off for their council housing meanwhile they are spending tens or hundreds of thousands of pounds punishing the people they are supposed to serve by installing more surveillance to issue fines and blocking roads
Looks like their diversity photo ops have not worked
Their investors are the same ones that invested in Netomnia, maybe they should handle the reigns over to the more competent company
Translation: Our customer take up number projections were wildly optimistic and now we’re having to backtrack.
This news of Altnets starting to fail is really getting concerning.
I feel sorry for the employees working hard to try and make it work when it’s clearly not viable.
I think the next big problems will come as investors start pulling out.
Staged award ceremonies, posh offices, fancy suits, popping champagne, big grins and handshakes for the cameras, etc. will only fool people for a short while.
When the money’s not coming in and investors start asking questions, it becomes very difficult to gloss over things.
As for Cityfibre… The bigger they are the harder they fall.
Why do you always refer to Colchester as a town. It is a city
See ya !
I’ve been looking at this from circa 2018 and sadly, my thoughts at the time are being realised. See https://bit.ly/3nlXZAc.
Pausing a rollout pausing a rollout is very expensive. It is in doubt that they will ever restart. Most alt nets are not in a very good financial position to start with