Amber Infrastructure Sells Stake in UK Broadband ISP Airband
International Public Partnerships Limited (INPP), the listed infrastructure investment company that is linked to investor Amber Infrastructure, has revealed that it is in the process of finalising the sale of their remaining stake in alternative network provider Airband.
Last month we reported that Airband, which aspires to cover 600,000 UK premises in rural areas via a mix of Fixed Wireless Access (FWA) and Full Fibre (FTTP) broadband networks by the end of 2025, had reportedly appointed restructuring firms AlixPartners and Houlihan Lokey to help find additional funding amid difficult conditions (here).
The ISP is currently owned by Aberdeen Standard Investments (ASI), which acquired a majority stake in November 2020, and in 2021 the network operator also secured a £100m debt package from an international banking consortium (HSBC, Lloyds, Nord LB and Sabadell). But the provider’s original founders, and investor Amber Infrastructure, retained minority stakes in the company.
Advertisement
However, in June 2023 it was reported that the ISP, which was said to require a “substantial injection of new capital“, was allegedly working on financing options to solve this problem. The latest market update from INPP suggests that there may soon be some movement on this front.
INNP Balance Sheet and Realisation
The Company maintains a strong liquidity position. INPP’s £350 million [revolving credit facility] RCF is currently c.£125 million utilised (including c.£17 million committed by way of letters of credit) and is available until June 2025, following the refinancing earlier in 2023. Current fund level leverage therefore constitutes c.4% of the Company’s 31 December 2022 NAV.
It is also the Company’s intention to repay c.£20 million of the RCF before the end of July utilising a combination of free cashflow and the proceeds from the sale of its remaining investment in one of its digital infrastructure assets, Airband, in respect of which a sale was recently agreed and which is expected to reach completion shortly.
Airband is a fibre to the premise and fixed wireless access network operator which, since INPP’s investment in 2018, has rolled out up to 1GB speed broadband to over 290,000 homes, businesses and industries in rural and hard-to-reach areas in the UK.
Sadly, the announcement adds yet another conflicting coverage claim (290,000), which is making it very hard to know how much progress Airband has actually made (ignoring the incorrect use above of 1GB for ‘Bytes’ instead of 1Gb for ‘bits’, and the endlessly awkward “up to” terminology). Back in May 2023 they claimed to have so far passed 200,000 premises, but it was unclear how many of those were FWA vs FTTP connections (here).
Confusingly, another press release, published in that same month, reported that Airband’s network had “brought superfast access to over 160,000 premises since its inception” (here). At the time, we did query why the figures were all so different, but received no response, and today’s update from INNP certainly isn’t bringing any clarity.
In any case, today’s news suggests that things are happing in Airband’s struggle to secure more funding. We have naturally asked the provider to comment. In the meantime, it’s worth noting that many AltNets are currently under pressures from rising costs, aggressive competition from rivals (e.g. overbuild) and the need to secure a viable level of take-up by consumers. Not to mention the need to continue delivering on their build targets.
Advertisement
Providers that struggle to obtain enough investment often have to slow their builds and cut jobs, with the potential for consolidation looming large.
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.
« UK Broadband ISP Freeola Launch Own IP Based Home Voice Service
Latest UK ISP News
- FTTP (6030)
- BT (3640)
- Politics (2721)
- Business (2441)
- Openreach (2405)
- Building Digital UK (2330)
- Mobile Broadband (2148)
- FTTC (2083)
- Statistics (1902)
- 4G (1818)
- Virgin Media (1765)
- Ofcom Regulation (1582)
- Fibre Optic (1469)
- Wireless Internet (1462)
- 5G (1408)
Whilst competition is undoubtedly a good outcome driver, overbuilding does not seem to be the right way of doing it. This will result in much redundant infrastructure rotting (or more likely just slowly falling to pieces and not biodegrading)
If competition had been to supply particular towns and get a 3 year exclusivity deal, there would be keen bargaining with councils for the ‘rights’ injecting money into the local economy. Then the installer would get a period over which to recoup their costs. Less waste??
Do airband still have any bduk style contracts still outstanding ?
Know everyone talking project gigabit but do they still have work in Cheshire /CDS on the go ? Don’t see much published about the older legacy projects now that are not finished . What’s the latest on that ?
Quite a few phase 3 contracts not finished yet …
What’s the latest ? Any ideas
Think Quickline have a few too – North Yorks?
Only a matter of time before they fail their Connecting Devon and Somerset commitments and the retendering charade will begin again just like it did with Gigaclear. Not rural, but in a CDS area and I just love the sound target dates make when they fly past.
The key issue is the procurement straight-jacket. Gigaclear was a challenge because the choice was to stick with them and work collaboratively to see if they could deliver or stop – in the clear knowledge that the consequence would be a new ( 12 month min.) procurement.
The situation is now rather different since historical State Aid regs mean that a new procurement is not possible. So, the best outcome is that Airband complete all or a significant proportion of their CDS contracts. If that involves an extension of time (if indeed that’s a possibility), tbh, that’ll be a better option than letting premises not delivered migrating into a Project Gigabit procurement with a potential 5 year delivery window.
I see the main issue being CDS awarding contracts to companies who cannot achieve what they say they will. The companies are too small and their tenders unrealistic (too small and too cheap) to get the win. Realistic providers who can do the build are rejected because they’re much more expensive and tell the truth about timescales.
There is an additional problem this time around though. Many fibre companies are struggling and in the next few months we’ll see more and more of them go under as funding dries up due to the poor economic situation. Airband is struggling for new investment as the article says and that’s been true for a while. For CDS they’ve over-promised and under-delivered just like Gigaclear did. It’s only a matter of time before Airband goes under and/or is slurped up and the CDS contract collapses.
Getting out of the CDS contract may have been the best thing for Gigaclear. Seems it may be a kiss of death.
It’s no surprise that every time you run a story on Airband, it seems to comes with an “Airband didn’t respond…” or “Airband wouldn’t clarify…”
If an altnet does cease trading without securing a takeover, what is likely to happen to their current infrastructure? Continue operating and be managed by the liquidator, or could it be switched off?
A liquidator would not run a service. They would turn it off and sell all the equipment, but they don’t want to do that if they can help it. The best option would be for a competitor to take over the service and integrate it in to their current services. That depends on someone wanting it though and I doubt that’s much of an issue given they can usually buy the infrastruture for a lot less than it cost to install which is a win.
We’ll see this more and more over the coming months and years. Smaller networks will be consumed by the bigger players as the “great altnet consolidation” ramps up.
I see Airband vans around here often, but they don’t provide broadband around here, so it is strange to see them around so much.
One of their engineers lives near you, or their contractor has a yard/stores near you.
I’m a director of a company in Devon.
Airband are operating FTTP in the area. During the sales process I received almost daily calls from them, the communication was good (maybe too good at times). They couldn’t do enough.
After placing the order the communication pretty much stopped. An engineer visit highlighted a break in a fibre, meaning that had to be repaired first, before they could install.
I’ve been promised updates from them regarding progress and timelines, with no replies. Customer services promise they’ll respond and again nothing.
How can companies like Airband expect to gain customers if they can’t get the basics right?
Don’t worry Tim, that’s normal for the other altnets around Devon too – you’re just getting the standard altnet treatment.
We stopped selling multiple providers services to our customers through them all because they are all unable to deliver the basic level of service we expect for our customers.