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ISP Hyperoptic Top 300,000 Customers on UK Full Fibre Network

Thursday, Oct 5th, 2023 (12:01 am) - Score 3,680
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Broadband ISP Hyperoptic, which is currently deploying their gigabit-capable full fibre (FTTP/B) network across parts of 64 UK towns and cities, has today announced that their network now covers “more than” 1.4 million homes (up from 1.15m in Feb 2023) and has a total base of 300,000 customers (up from 275,000).

The operator, which only a few months ago announced a number of redundancies and appeared to suffer a slowdown in their pace of build (here), currently hopes to cover 2 million premises with their network by some point in 2024 (the previous target was for the end of 2023). On top of that, they’re also aiming to grow their customer base to 500,000 in the near future.

NOTE: KKR acquired a majority (75%) equity stake in Hyperoptic during 2019 (here) and the operator, which is home to c. 2,000 staff, has so far secured £600m in debt to fund its growth.

Until recently Hyperoptic, which first started their rollout all the way back in 2011, had been primarily focused on upgrading big residential buildings (MDU). But in recent years they’ve also expanded out to tackle housing (SDU) and, despite recent changes in their strategy, are clearly continuing to expand their coverage.

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However, in case anybody has forgotten, Hyperoptic originally aimed to cover 2 million UK homes by the end of 2021 and 5 million by 2024. But the company’s boss, Dana Tobak, acknowledged to ISPreview last year that they’d set “some pretty lofty goals in our early days” (here) and were adjusting to adopt more realistic targets.

Still, it’s important not to lose sight of the fact that 1.4 million premises is still a huge achievement, while their take-up rate of 21.43% seems reasonably healthy – particularly given how much competition exists in the current market.

Dana Tobak, Hyperoptic’s Founder and CEO, said:

“The most important job we have is to connect customers – that’s how we show people across the UK that there’s a better way for broadband to be done. We know that broadband users deserve better, and we’re committed to a five-star customer experience.”

Customers of the service typically pay from £25 per month on a 24-month term (plus £29 activation) for a 50Mbps package, which rises to £45 for their top 1Gbps plan (currently free for the first 3 months of service) with a £19 one-off activation fee. The provider also offers a cheaper Social Tariff for those on benefits.

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Mark-Jackson
By Mark Jackson
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 .
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Comments
14 Responses
  1. Avatar photo Jay Miah says:

    good setup, it looks like a juniper ACX for backhaul and an opengear OOB.

    1. Avatar photo Facts says:

      There’s no Juniper equipment in that cabinet

  2. Avatar photo Ed says:

    Reaching an additional 250,000 to only add an extra 25,000 customers is a recent takeup rate of 10%. That would suggest that the market (or, at least, where Hyperoptic have chosen to build) is rapidly approaching saturation levels, and that funding future expansion might therefore be easier said than done. I don’t think their future is as rosy as their press release wants to state.

    1. Avatar photo Anon says:

      That’s a good take up rate for newly built. People will be in existing contracts with other suppliers. It does suggest saturation at all

    2. Avatar photo Anon says:

      *doesn’t

    3. Mark-Jackson Mark Jackson says:

      Take-up grows very gradually for all operators, except those doing a targeted demand-led build, where prior expressions of interest are required before any work takes place. It took 2-3 years for BDUK deployments of FTTC to grow to the 20-30% mark and that was with many of those networks having no competition (this was actually well ahead of the original expectations too).

      This is why you can’t judge take-up over the short term, you have to give it a few years to grow organically before judging success. You can also only truly judge that success if you know the cost per premises passed, which for MDU and PIA heavy builders like Hyperoptic should be much lower.

    4. Avatar photo Andrew G says:

      Unfortunately, because Companies House live in the last century, by the time statutory accounts are published they are meaningless. As a result it’s almost impossible to form a fair judgement on conversion rates, build costs, and the commercial direction of any fast growing altnets. Whilst Hyperoptics 2022 accounts should be published in a few days, they’re so out of date what can you say – and until then we’ve only got the even more historic 2021 accounts when they had only 224k customers.

      Having said that, that 224k punters was against 751k properties passed (an impressive 29.8% conversion rate?) and with £309m gross investment in network and PIA investments at end of 2021, meaning £1,380 per customer. Hyperoptic have the best business model of any large altnet, yet I remain sceptical that they can survive at the prices they currently charge. As at end 2021 they owed £405m, shareholders were nursing accrued losses of £234m and the company burned through £112m of cash in the year. These are all very big numbers for a company that even now has only 300k customers.

      For 2021, it’s also possible to estimate their ARPU at £26.85 per month – that’s not so good when you’ve got those enormous numbers mentioned in the paragraph above. With considerable exposure to social housing, their social tariff take up may be considerable, especially when that can give 150Mbps for £20 a month or so.

    5. Avatar photo Peter Hinton says:

      @Andrew G
      Genuine question: do you ever have anything good to say about **ANY** ISP? Its always moan moan moan with you!

  3. Avatar photo Oggy says:

    An overall ~20% take up rate against CF who were struggling with, IIRC, a 7 or 8% take up rate.

    Showing how an altnet can be successful if they can do it correctly.

    1. Avatar photo Facts says:

      Not comparable.

      Cityfibre are now > 10% with their early builds around 30%.

      Hyperoptic have been going for much longer and generally only build MDU. A very different target market.

    2. Avatar photo Anon says:

      Hyperoptic originally focused on MDUs and they would only build when they had a good level of interest, that meant their take-up rates were high and not a fair comparison to altnets digging up streets to serve individual houses (SDUs).

      Recently Hyperoptic moved to covering SDUs too, especially partnering with home builders. One development near me has Hyperoptic, Openreach and VMO2 fibre to each house (CSP or equivalent and ducting for all three to front of each house). I’m not sure how their takeup rate looks when customers have a choice like that, last time I passed I didn’t see a single hyperoptic box on the front of a house with a fibre connected.

      CityFibre focused on building whole cities not just MDUs hence different numbers to be expected. Their takeup is much higher in their earlier cities as you’d expect and the last numbers they published they were into double figures as a whole.

    3. Avatar photo John says:

      Hyperoptic has been operating for twice as long. Takeup takes time. Come back in 3 years when CF has more customers

  4. Avatar photo Richard nuth says:

    https://www.youfibre.com £27.99 for 1gig up and down

  5. Avatar photo Bob says:

    If they are involved with supplying new builds an obvious strategy would be to work with the developers and as a part of the house sales include 12 months FTTP for free. That way you get a 100% take-up. Probably after 12 months they would loose a few but most would keep it. It would also reduce the install costs as doing all at once is more efficient

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