Nexfibre Pledge to Build More UK Full Fibre in 2024 Than Any AltNet
The CEO of nexfibre, Rajiv Datta, has revealed in a new interview with the CEO of ISP Zen Internet, Richard Tang, that they intend to roll-out their full fibre (FTTP) broadband network to “more homes in 2024 than any [other] altnet” and will shortly pass 1 million homes. But Virgin Media (VMO2) remains their only ISP, for now.
In case anybody has forgotten. Telefónica, Liberty Global and InfraVia Capital Partners created a new joint venture called nexfibre in 2022 (here) – backed by £4.5bn (£1.4bn in equity and £3.1bn in debt) – that aims to deploy a 10Gbps capable open access full fibre (XGS-PON FTTP) network to reach “up to” 7 million UK homes (starting with 5 million by 2026).
Both nexfibre and Virgin Media (VMO2) share the same parentage, although nexfibre differs in that their network is open to wholesale (Virgin Media is a closed network) and their build is focused on areas NOT currently served by Virgin Media’s own network of 16m+ premises. The approach also enables Virgin Media to expand their reach without Ofcom forcing them to open up to wholesale, although VMO2 have long prepared for that too.
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The most recent development saw nexfibre reveal their first full roll-out plan for 2024 (here) and we’re expected a progress update on that work to surface within the next week or two. The new interview doesn’t really add much in the way of truly fresh information about the operator’s plans, but it does provide some extra context and a few interesting titbits.
The Nexfibre Interview
For example, Rajiv Datta was keen to stress that they’re “accelerating build” at a time when a fair few other alternative networks are being forced to slow their deployments and make redundancies, often due to the current climate (e.g. rising build costs, high interest rates making it difficult to attract fresh investment, aggressive build competition and the related challenge of growing take-up).
Rajiv added that other alternative networks, aside from the stress caused by “interest rates going up“, are also facing a “little bit of credibility issue around the pace at which they’re getting customer connections and penetration, relative to their plans“. Of course, it’s entirely possible that nexfibre might eventually run into this too (it’s currently too early to judge), but Rajiv disagrees.
By comparison, he says nexfibre aim to have “real discipline around our build, so we’re very focused on how we’re building, what we’re building, what our cost of build is, what the best use of that build capex could be, including where we’re building. But the other thing that we’re very focused upon is penetration” (VM side helps drive this a lot) – making their business plan work, adds Rajiv, involves “building quickly, but also getting penetration quickly.” We suspect AltNets that have been at this game a bit longer would say that’s easier said than done.
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Interestingly, Rajiv predicts that nexfibre somewhat ambitiously expects to “breakeven before we stop build [end of 2026], and that’s pretty quick.” Indeed, that would be quite an impressive achievement, given that many other networks typically have a longer time horizon for reaching the break-even point (i.e. the point in a business venture when the profits are equal to the costs).
Coverage, Wholesale and Consolidation
As well as noting that the operator would be “passing a million homes … early this year” (if we include Upp’s network, then they’re already close to that level), Rajiv also laid down the gauntlet by pledging that they “will build more homes in 2024 than any altnet in the marketplace … second only to Openreach.” We think that’s likely to be correct, since CityFibre are expecting to add 1 million premises this year (partly through consolidation) and nexfibre should be ahead of that (only a very few AltNets, like Netomnia, are still deploying at this sort of scale).
On consolidation, Rajiv said they were open to more acquisitions, like the deal done with Upp. But he was keen to stress that their main plan is still based around build. Put another way, they aren’t pursuing growth through consolidation to the same degree as CityFibre seem to be, but they are keeping their options open, where it makes sense.
Nexfibre’s boss then clarified that they’re focused on building as much of their own physical network (i.e. trenching and new poles) as possible, rather than pursuing the lowest possible cost (PIA heavy). Rajiv complains that the lower cost model leaves too many gaps in coverage, whereas they wish to deliver solid coverage across an area and be less reliant on harnessing Openreach’s existing ducts and poles (though PIA still has a big role to play).
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At this point the discussion switches to wholesale, and we learn something new from Richard Tang, who is clearly curious to know when his ISP, Zen Internet, might theoretically be able to apply to join nexfibre. Despite Virgin Media already using the new network, Rajiv states that they’re still not quite ready for other ISPs: “We’ve got a few I.T. systems activities that are ongoing, which we expect will be complete within the coming months that will allow us to actually physically bring customers [ISPs] on to the network.”
However, this is often only part of the onboarding challenge, since much will depend upon what kind of product and terms nexfibre are able to offer and the divisive issue of exclusivity agreements. Navigating this side of things and being fair to all partners is a very tricky aspect to get right. Rajiv adds that the discussions on how they can leverage wholesale and adopt the “right model” is “happening now” and he says they’re looking forward to doing that with Zen (possibly).
Finally, Rajiv notes that nexfibre effectively arrived a little bit too late to take part in the Government’s Type B (regional) subsidy contracts under the £5bn Project Gigabit broadband roll-out programme. But the operator does still find the project “quite interesting” and are keeping an open mind to any opportunities for complementary contracts in the future, although they’re more focused on the semi-urban and semi-rural style areas.
Readers can check out Richard’s interview series here, and we’ll paste the latest video below.
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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Why is there a picture of Zen for ……….
?
What picture of Zen?
Richard is CEO of Zen. He;s interviewer. The image is from the interview. I don’t get what you don’t understand. It’s quite simple.
Very tenuous for Nexfibre to consider themselves an altnet surely?
SYMMETRIC as an option and XGS-PON. Did you hear that BT?
And discuss…
Yahuh, The BT Thread wasn’t enough for you?
If you want faster services – go get faster services. Don’t sit and whinge the incumbent isn’t as fast as you want.
Nope. Want more.
You’ll find no fawning over BT’s crippled deployment here.
Well said Matt
Says another BT Protector.
@anonymous
“ SYMMETRIC as an option and XGS-PON. Did you hear that BT?
And discuss…”
I chuckled to myself reading this – No no not again !
I think the point got across on the other thread. Some BT fans think Denial is a river though.
Seriously boring and sanctimonious. Openreach seems to be living rent free in your heads.
I always find these interviews very interesting. Thanks Richard.
Yep, agree, but why can’t Mark get these interviews? This site must be big enough and well known in Telecom circles now.
Mark doesn’t spend millions of pounds each year buying the wholesale services from the people being interviewed, or being in a position to do so in the event that the network chooses to wholesale. Everybody involved in these interview videos can allocate the costs involved to marketing activities.
I actually do several interviews each year, usually with different players in the market:
https://www.ispreview.co.uk/articles_interviews.shtml
However, I choose not to do too many because most of my time needs to be spent covering the daily developments, as well as maintaining the site’s systems. I simply don’t have the time to fit everything in, so that requires discipline and for me not to take on more than I can handle.
Fair enough. Articulated answer.
Interesting comment about using PIA considering wherever I have seen their build in the south they have utilised PIA
Interesting – no PIA in my small town on the south coast (at least that I can see) but lots of useless 70s ducts (or poles) that make it less useful. They seem to be ducting everything that I can tell (and installing cabinets every 100m or so).
They are currently upgrading the northern half of Sheffield, most of the work seems to be installing new cabinets for the fibre patching and OLTs at the moment. As their ducts should be newer they shouldn’t need as much work as an altnet or Openreach to get the fibres in, but let’s see.
Waiting to see what happens where we are, we were about the last area to be infilled with RFoG before they moved to NextFibre and XGS-PON. They put in the cabinets to take the OLT so let’s see.
My town is on the rollout plan PDF they have on their website for this year, but checkers like one.network and bidb.uk don’t show any planned work from them.
Virgin installed RFoG a couple of years ago, so will they just be upgrading the current infrastructure?
The nexfibre is separate from but related to VM’s network. As for VM’s own network there is a project underway to migrate all of it to XGS-PON.
I love how the wording changes every few articles. Sometimes it’s new areas with no VM presence at all, and other times it’s homes not currently served by VM.
One could be interpreted different to the other.
To be honest I can fully accept this based on local evidence. Trooli took 2 years to lay fibre to half my town then gave up on the rest as best I can tell (including my half of the street). Giganet spent 2+ years and have finally covered most of the town but it is taking their team 2 weeks to duct my street. Nexfibre did it in 2 days! (They went from appearing in One.network in late October to nearly being ready to order in less than 5 months.). If the national rollout is similarly fast they will squeeze out a lot of altnets before they can finish deployment plans.
This is probably for the best.
Do we really need to end up with more than 3 national network providers? OR/VM/CF is surely enough.
Let the consolidations begin already.
@Cheesemp
Exactly the same experience as we’ve had in Banbury with Swish (Fern). They started over a year ago (already 16 months after Openreach went live), and they’ve only just completed in the last week. Openreach now have a 2 1/2 year advantage and are now approaching 50% take up.
@Big Dave – One big difference here – No openreach fibre presence and none planned. I think giganet (who are part of the same new merged group all points fibre as swish) have accelerated plans in the town due to nexfibre!
When will we see Zen Internet, offering Netgem TV Service?!
The annonce dates from Jul 6th, 2020!
To reamember:
https://www.ispreview.co.uk/index.php/2020/07/broadband-isp-zen-internet-uk-to-offer-netgem-tv-service.html
Netgem is rubbish, why do you want it?
How will Nexfibre convince ISPs who aren’t owned by Liberty Global that they’ll get the same level of service as VMO2, who are?
There has to be an arms-length relationship between nexfibre and VM, same as Openreach and BT. And like Openreach nexfibre will have to publish its wholesale prices
Before the split to Openreach, how did BT assure ISP’s?
At a guess, infrastructure will move to NexFibre eventually. VMO2 will be the ISP side.
BT had a track record (good and bad) prior to forming Openreach, and a regulator that is very interested in ensuring that they follow the rules
this wouldn’t apply to anyone else. Ofcom isn’t going to care if Nexfibre offer special treatment VMO2 as they would if Openreach did to BT/Plusnet/EE
Openreach is regulated so has always had to report on how equivalently it serves different ISPs – it’s been like that since 2006.
NexFibre isn’t regulated, so if I’m an ISP looking to buy from them, I’m going to need some pretty strong evidence that I’ll be getting the same care, quality and pricing as their sister company does – and that I wont be behind VMO2 in the queue when it comes to innovation or recovery.
Isn’t that what contracts and SLAs are for; it worked for BT?
It may not be regulated now but I am sure OfCom will regulate once ISP’s join as its pretty known its VMO2 behind it. Remember the eventual plan is that the HFC network when upgraded to full fibre, will also be wholesale access.
@Alex
That will be down to the contract a retail ISP draws up with NexFibre (or any other altnet for that matter). Then in extreme circumstances it may be up to a court to arbitrate on.
Openreach get special treatment because BT has either SMP or a monopoly. That would not apply to any of the competition no matter how big they get, unless they somehow achieved successes that look so very far away right now.
Ironically the rise of the altnets and VM going wholesale would actually give BT a case to demand that the shackes are removed and OR can compete in full in its own right.
@anonymous
If you look at the way Nexfibre has been setup it is deliberately done so VM has no say in the way it is run (at least in theory). It may be 50% owned by Liberty but it has clearly been constituted to avoid unwanted interest from Ofcom.
@Roger
Only if they achieve SMP. Ofcom will have no particular interest in fairness until that point and nexfibre will be free to charge one ISP twice the rate they charge another if they so decide. Only commercial considerations will influence their pricing. The requirement to be ‘fair’ is an Ofcom rule applied to BT and Openreach and even then only where SMP exists.
Yes, 125us – which suggests ISPs should be very wary that they don’t get an inferior service on Nexfibre to what VMO2 will get.
Interesting how the CEO of nexfibre wants to position itself as the only network alternative to Openreach. Of course that’s what he wants. Personally I would want the Altnets to be broken down into networks and ISPs. It’s true that these are two different businesses but for customers it’s best to have a single one. No one passing the bucket saying it’s “Openreach’s fault”. Also by combining the two businesses you can be more competitive on pricing as ISP arpu could subsidise network costs. That’s what BT wants, break it in two and bill you wholesale then bill you retail. The more middle men the more expenside.
Fine unless you run a business and want to order connectivity for 20 sites around the UK and have to deal with 20 ISPs.
Never presume your use case is the only use case.
BT would love to not have to wholesale their last mile and sell you the whole thing – it would eliminate 70% of their competition in one go.
When the infrastructure and the ISP are one and the same Virgin Media is what you get. Nobody wants that.We need 3 or 4 infrastructure providers and multitudes of ISPs. That’s what is best for consumers.
Looking at the Think Broadband website there is a lot of the Nexfibre network which is also in Virgin areas. I wonder if Nexfibre’s numbers are just incoorporating Project Mustang build.
For example every place in South Wales which is Nexfibre, also has VM. Looking at Milton Keynes, there is 100% overlap between VM build and Nexfibre build – it looks as if either Mr Datta is taking credit for VMO2 build, Think Broadband has incorrect data or Nexfibre is overbuilding Project Mustang
@Nexfibre
Well the map says VM cable, maybe one for Andrew at Thinkbroadband. From knowledge of my town, i thought some of those areas had cable already, so is Nexfibre overbuilding VM cable? I know it is extending where VM has part built towns – eg Whitney, Billericay
Amazing what a mess people can make of simple things…
nexfibre will show for a postcode if available
virgin media will show if coax or rfog or nexfibre available
Andrew
To make it clearer
https://labs.thinkbroadband.com/local/broadband-map#6/51.414/-0.641/
Now says Virgin Media Retail coax/rfog/nexfibre
and the nexfibre entry is
nexfibre XGS-PON wholesale FTTP
Thanks @Andrew Ferguson!
Does Nexfibre publiciy show there retail pricing like BT does?? how much are they “charging” virgin for these packages
They’re as public about it as CityFibre are.
I thought it was a great interview and Mr. Datta comes off as a very credible and well thought out individual but…and it is a big one!
He said VM was not an owner of Nexfibre it is only a “partner”. That is hiding the ball with a thin curtain. VM is owned by Liberty and Liberty is a shareholder in Nexfibre (just sub VM for Liberty GLobal and you are there). The only way Nexfibre has come to be is Liberty the other shareholders are along for the ride and should do well if all goes to plan. He can treat them like a partner in his mind or for legal reasons but they own Nexfibre’s future. Whether they are sold, kept separated or combined with VM later is largely up to Liberty I would argue. They are a vehicle for VM to build and wholesale which they tried to do with Sky in the past unsuccessfully.
Think who gives Datta his objectives? Where are the builds directed to go to provide the best VM penetration? I am sure he would like to have more partners and maybe that is the direction he is trying to indicate to the market.
Virgin media areas where customers have had Rfog built in the last few years maybe feeling a little disappointed. The joint venture between Nexfibre and Virgin Media seems to be prioritising XGSPON for mostly parts of the country not covered by VM. The town where I live had Rfog built around three years ago, but now a small village a few miles outside has been pencilled in for XGSPON from Nexfibre this year. Seems like Rfog areas may be near the last to change to the better and speedier XGSPON, leaving many waiting for 2G symmetric closer to the expected 2028 full changeover. Many on this site who have had bad experiences with VM, won’t be bothered at all!
Interestingly, they have beaten CityFibre, BeFibre, and Openreach in getting things moving in Skelmersdale. Openreach are only interested in the new build estates, but not the developments being built by the local council..
A quick look at https://bidb.uk/ shows Nexfibre as the only ones with work that’s either started or about to start in the town despite promises from both CityFibre and BeFibre about coming to Skelmersdale, something they former has been saying for 4 years now.
I’ve been to check out some of the installation work and on the roads, they’re using narrow trenches, maybe 6 inches wide at the most and in the flagged / paved areas they’re actually re-placing the flags whereas some of the other providers mentioned in my comment are happy to just cut up the flags and infill with tarmac. See Sapling Rd, Bolton, for proof of how messy Cityfibre can be when it comes to flagged pavements. What I do find strange though, is that Nexfibre are displaying not their name, but Virgin Media’s on the roadwork fences and permit sign..