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CityFibre Begin UK Fibre Broadband Consolidation with Lit Fibre Buy UPDATE4

Thursday, Mar 14th, 2024 (7:37 am) - Score 10,600

Network operator CityFibre, which has made no secret of its desire to boost the growth of their 10Gbps capable Fibre-to-the-Premises (FTTP) based broadband ISP network through consolidation (example), will later this morning announce the c.£80m acquisition of alternative network provider Lit Fibre.

At present CityFibre’s wider ambition remains to cover up to 8 million UK premises (funded by c.£2.4bn in equity, c.£4.9bn debt and c.£800m of BDUK subsidy) – or around 30% of the UK – by the end of 2025 (here). The operator’s full fibre network currently covers 3.5 million UK premises (3.2m as Ready for Service), with packages available via various ISPs (e.g. TalkTalk, Vodafone, Zen Internet etc.).

NOTE: Lit Fibre is backed by an unspecified equity investment from Newlight Partners LP. CityFibre is owned by Antin Infrastructure Partners, Goldman Sachs Asset Management, Mubadala Investment Company and Interogo Holding.

The operator is currently looking to grow their network coverage by another 1 million premises this year, but they’ve also previously signalled their expectation that a big chunk of this could be delivered through mergers and acquisitions (M&A). Looking forward over the next two years, such M&A activity alone could theoretically add up to 1.5-3 million extra premises to their coverage.

Cityfibre has been involved in such acquisitions before, much as we saw when they acquired the FibreNation network from TalkTalk for £206m in 2020 (here). At the same time, a growing number of other alternative network operators are also under increasing strain from rising build costs, competition, the challenges of growing strong take-up or the difficulty of attracting new investment while interest rates remain stubbornly high.

Suffice to say, if you’re positioning yourself to be a consolidator, then now is the hunting season. Previous reports have indicated that CityFibre may seek to deliver around five acquisitions over the next 24 months. Back in January 2024 the operator’s CEO, Greg Mesh, said they were in “exclusive talks” with two altnets, developing offers for three others and are under non-disclosure agreements with six more (here).

The LitFibre Deal

At present Lit Fibre looks set to be one such AltNet, which started their deployment in 2021 and aimed to reach 500,000 homes by 2026. The operator is currently rolling out their network to cover numerous towns across several of England’s counties (e.g. Wiltshire, Gloucestershire, Hertfordshire, Worcestershire, Essex, Suffolk and across the Midlands). So far, they’ve already covered 140,000 premises RFS (26th July 2023), which is up from 100,000 in April 2023.

According to Sky News, CityFibre has allegedly agreed a deal to acquire Lit Fibre. The deal would give their current owners, Newlight Partners, roughly 2% of the combined group – effectively valuing Lit Fibre at around £80m (depending upon how you play with the figures).

The report suggests that Lit Fibre’s network currently covers 200,000 premises (not sure if this is a ‘Ready for Service’ figure), which seems roughly in keeping with the progress they’ve been making. Apparently, the deal will enable CityFibre to “accelerate its national full-fibre rollout by close to 300,000 premises“, which we understand is a combination of the operator’s existing 200k of coverage and another 100k that’s already in near-term planned or active build via Lit Fibre.

Sky suggests that a formal announcement will be made today. So far, neither side has given a comment, but if confirmed then Cityfibre will still have to deal with the often complex and costly challenge of integrating a different network into their architecture. On the upside, there’s practically no overlap between CityFibre’s and LitFibre’s networks.

UPDATE 8:29am

We’ve had it confirmed that the deal is happening. Just awaiting the PR.

UPDATE 9:05am

In terms of that 300,000 premises figure above, the expectation is that CityFibre should reach that as RFS before the end of 2024. In fact, within about 6 months, the operator should be able to offer their wholesale ISPs the same products and services via the LitFibre side of their network as they currently get from existing CityFibre areas.

UPDATE 9:20am

We understand that the Lit Fibre brand will be retained by the deal, albeit acting primarily as a residential ISP for new and existing customers. But in order to avoid a conflict (CityFibre focuses on wholesale, not retail), it’s not unreasonable to assume that there might come a time when Lit Fibre’s brand and customers are acquired by one of the other retail providers on CityFibre’s network.

UPDATE 11:44am

The official announcement has now been published. As expected, the details are much as previously reported above. The share-based acquisition will see Newlight Partners become minority shareholders in CityFibre and is expected to be completed in the second quarter of 2024.

The release also confirms that Lit Fibre has a current footprint of over 200,000 premises across more than 20 towns in Wiltshire, Gloucestershire, Hertfordshire, Worcestershire, Essex and Suffolk, and serves a growing subscriber base of more than 9,000 retail customers.

Greg Mesch, Chief Executive Officer at CityFibre, said:

“Our self-build rollout programme has already delivered more than 3.5m premises to our partners and we’re excited to accelerate this even faster through targeted acquisitions like Lit Fibre. But competition is not just about scale, it’s about providing partners access to carrier-grade networks that reduce their costs to serve and improve the service experience they can provide their customers.

The UK market needs a third infrastructure platform of scale to ensure competition matures and that it continues to deliver for consumers and the country. Our acquisition of Lit is a clear demonstration of our intent to establish CityFibre as the core of that third platform.”

Tom Williams & Ben Bresler, Co-Founders at Lit Fibre, said:

“We are delighted that CityFibre has decided to acquire Lit Fibre, the first in their new targeted acquisition strategy. Just over three years ago we established Lit to bring internet connections of the highest quality to towns across the UK. Along with our team we’ve been successful in building an enviable reputation for quality and customer service that our customers rate highly.

Our efficient build model and reputation for excellent quality and service has been recognised by CityFibre and we’re looking forward to working with them in the coming months to complete the deal.”

Houlihan Lokey acted as financial advisor to Lit Fibre on the transaction. EY supported CityFibre with financial due diligence on the transaction. Weil, Gotshal & Manges LLP acted as legal advisor to Newlight Partners, Bristows LLP acted as legal advisor to CityFibre, and Stevens & Bolton LLP acted as legal advisor to Lit Fibre. Cartesian acted as integration advisor to CityFibre.

Lit Fibre is currently available in Midsomer Norton, Radstock, Redditch, Melksham, Harpenden, Sutton Coldfield, Chippenham, Cirencester, Evesham, Clacton-on-Sea, Bishops Stortford and Sudbury, with installation underway in St Albans, Chelmsford, Welwyn Garden City, Stratford-Upon-Avon and Potters Bar.

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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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38 Responses
  1. Avatar photo RightSaidFred says:

    It’s about time that consolidation started to get some traction, but I fear it isn’t happening fast enough.

    Until an altnet with 1m+ RFS gets acquired, we can’t really say with confidence that anything worthwhile is happening.

    How many altnets are there with 1m+ RFS?

    IMO, trying to stick around to be the last to sell out is a mug’s game, since by that point you risk massive overbuild and consequently becoming irrelevant as a consolidation target.

    1. Mark-Jackson Mark Jackson says:

      Since 2020 there have already been around 10 consolidations among AltNets, and in that I’m including Fern’s internal merger of three networks as 1 and Voneus’ merger of three other networks as 1. What’s more, most of those occurred in 2023. So I’d say consolidation is already well underway, and I’m not considering retail ISP consolidation in this either, which is separate.

    2. Avatar photo RightSaidFred says:

      Yes, no doubt there have been some that have been consolidated, but it means nothing until the likes of Hyperoptic or Community Fibre have been consolidated as almost every other altnet is tiny by comparison.

      How many altnets are there that have total RFS equal to what OR can put out in a month? Not many.

      The point is, if you wait until a big player arrives to compete, then you’ve waited too long to sell out. The value proposition drops the moment OR/VMO2(Nexfibre)/City Fibre move in.

      Get out before they get in seems to be the only logical play here.

  2. Avatar photo Jonny says:

    Well this could be good or bad. I’m happy with the service I’ve had from Lit and their build team have been far easier to talk to than my experiences with CityFibre.

    1. Avatar photo Lit Fibre Customer says:

      Likewise for myself, very friendly customer support and good service. Having been the first town they deployed to, it was nice seeing them go from my town and expand out to other counties in the UK.

      The times I did have issues and an engineer had to come out, they were very friendly and knowledgable and would tell me the ISPs future plans etc. I’m concerned that this element would be lost if I had to switch ISP.

      Not sure how the article reads but CityFibre themselves do not provide the broadband over the fibre themselves, this is provided by other companies such as Vodafone. Wonder if this means i’ll have to go and search for a new provider and lose my ability to have 1Gbps up & down? or have to compromise on the 1Gbps upload which I actually do utilise.

    2. Avatar photo Lit Fibre Customer says:

      Having re-read the article, it looks like Lit will remain as a the underlying broadband provider which brings me some relief. Although I’d imagine they’ll have a very top down approach from their new owners on what plans they provide and at what price point.

    3. Mark-Jackson Mark Jackson says:

      It’s not currently clear if Lit Fibre will remain, albeit as merely a retail ISP for customers. But we’re about to find out.

    4. Avatar photo Harmeet says:

      @Lit Fibre Customer,

      The majority (if not all) of the ISPs that sell service on cityfibres network offer 1gb down AND UP!

      some of the larger ISPs still show 115mb up as they are grouping the product with their openreach offering, but I can assure you, you will get symmetrical gigabit. First hand experience of this with zen, and also talktalk (who were adamant on the call to sales that it was only 100mb)

    5. Avatar photo Big Dave says:

      Surely it would be in Cityfibre’s interest to have a retail arm. BT group do retail and wholesale, as VMO2 open up wholesale they will do both, if CityFibre makes acquisitions that have retail ISP’s then surely it would be (at least in the short to medium term) make sense for them to be merged into a “CityFibre Internet” ISP to promote take up on their network as well as their wholesale business.

    6. Avatar photo NE555 says:

      > Surely it would be in Cityfibre’s interest to have a retail arm

      They do for business services: it’s called Entanet.

      But in the B2C arena, they’d be competing with their own wholesale customers. It’s the big names like Vodafone, Talktalk and Zen that reel in customers who would otherwise be unsure about changing to an unknown name.

    7. Avatar photo Big Dave says:


      Well as long as they don’t start undercutting they’re own wholesale customers I don’t see that as a major problem. Their wholesale customers go with them because they are considerably cheaper than Openreach, so would they abandon CF and go back to OR?

  3. Avatar photo carlconradw says:

    £80,000,000 for 200,000 homes passed meets the equivalent build cost test for an AltNet. However, given the competition from Openreach I would have expected that figure to have be discounted a little more. They should take the money and run as other AltNets are unlikely to get anything better and could well be worse.

    1. Avatar photo Iain says:

      Isn’t that much cheaper than CityFibre’s recent real world build costs? Seems like purchasing an alt-net is cheaper than building your own network. (I’m sure this doesn’t shock a lot of people.)

    2. Avatar photo Jonny says:

      If it’s cheaper than the CityFibre build costs then it’s likely down to using PIA and locating equipment in Openreach exchanges rather than building a physical duct network and having to acquire land for FEX locations.

      I wonder if these areas will get FEXs in the future?

  4. Avatar photo j karna says:

    Community Fibre will be next their takeover target.
    I have no personal experience with CityFibre, but two friends have experienced no end of issues with CityFibre.

    1. Avatar photo Jordan says:

      CityFibre cant afford to buy CFL.

      CFL are worth billions whilst only building in London.

    2. Avatar photo Big Dave says:


      They would if Community Fibre’s owners took shares in the consolidated company rather than a cash buyout. They only company that I could think of who could offer cash for Community Fibre would be VMO2/Nexfibre and that’s if they were interested.

  5. Avatar photo Jordan says:

    G network / Toob are next i say.

    1. Avatar photo Cheesemp says:

      I think Fern are setting up the giganet/swish/Jurassic/all points fibre/cuckoo group for merging – I can see them taking a share of cityfibre for the lot.

    2. Avatar photo Ben says:

      Exactly this — I can see Fern being willing to swap 100% of their network for x% of CityFibre.

  6. Avatar photo RightSaidFred says:

    I think it is important to realise that once someone switches out from one network on an inferior technology to FTTP, that customer is unlikely to then ever switch over to another network.

    I very much doubt there’s many people that want multiple fibre connections into their property.

    There has to be a realisation that FTTP will never be on the same competitive standard that matches that in MNO category. The practical realities of switching networks make that blindingly obvious.

    Are there any stats showing how many VMO2 customers have switched to another network provider?

    The altnet consolidation needs to happen quickly so that they can start enjoying the benefits of scale. The longer they leave it, the less actual customer base they’ll migrate away from OR, and in the long term that impacts even the consolidated firm’s viability.

    1. Avatar photo Harmeet says:

      I think the majority of households will have no idea of the underlying network and will switch.

      For example, if a customer is in an openreach fttp area, and happy with their service from BT , when they come out of contract and price hikes, they’ll shop around. If CityFibre has been rolled out, suddenly they’ll see a MUCH MORE competitive deal with the likes of Vodafone or talktalk, and take the service.

      They’ll only learn that their switching network when the engineer turns up to install a second ONT.

    2. Avatar photo Big Dave says:


      Agree although I did note on recent trip to Swansea how many Openreach FTTP connections there were although VMO2’s HFC network has been there for years so maybe people will put up a couple of boxes. If there is going to be a third national network which would seem the logical path (given what happened with the amalgamation of the cable companies into VMO2, indeed originally telephone services were locally run before being taken over by GPO – with the notable exception of KCom) then CityFibre are probably going to be the ones that do it. Personally I hope that Fern are next on CityFibre’s radar.

    3. Avatar photo No Name says:

      @harmeet is pretty spot on with this.

      It’s the same reason why people still don’t understand that you can’t get VM down an openreach line. They still moan about not being able to get the service and say “why do you need to install cables in my street. I already have a phone line”.

      Consolidation is good and @RightSaidFred is also correct about the ONTs. I’ve already got a VM ONT and BT master socket and think my house is cluttered.

      I think people won’t go back from FTTP when they see how reliable it is. But I do reckon they’ll still switch, no matter what underlying FTTP network it is, for price alone.

  7. Avatar photo John says:

    Wonder if Tom and the rest of Lit thought it was a good idea to sell at build cost price

    1. Avatar photo John's friend says:

      Didn’t sell at build cost which is the beauty of it all 🙂

  8. Avatar photo John doe says:

    We are due to see redundancy being made within the coming days.

    Believe more then 50% of the work force will be laid of.

    Thanks LIT

    1. Avatar photo CF Employee says:

      And you know this how?????

  9. Avatar photo Atrisk employees says:

    Fantastic news for all the C/F network build staff currently going through the redundancy process. Bit less trumpet blowing might have been appropriate.

    1. Avatar photo Anon says:

      Oh come on, anyone working in the sector knows this has to happen. Plan your exit (or remain) strategy accordingly, and make sure you get to 2 years’ service in case they go for compulsory redundancy without enhanced terms (not that statutory compulsory is that great….)

  10. Avatar photo Peach says:

    £400 per prem for a business that I reality has around 4.5% take-up, only time will tell if this is a good move for Cityfibre

    1. Avatar photo - says:

      That is a very fair price actually. 33.33% takeup would mean return in 5-6 years on an asset that will last 60 years

  11. Avatar photo Lit Fibre Customer says:

    Lit Fibre have just emailed to announce the acquisition:

    “As always, we want to keep you in the loop about any changes here at Lit Fibre. We wanted to let you know that we will shortly be acquired by CityFibre.

    Who are CityFibre?

    The CityFibre network serves more than 3.5 million UK homes and businesses, making it the country’s largest independent full-fibre infrastructure provider. To find out more visit http://www.cityfibre.com.

    What does that mean for you?

    The great news is that you don’t need to do anything. Lit Fibre and CityFibre are committed to providing you with exactly the same pricing and fabulous service you currently enjoy.

    What’s next?

    We will be back in touch in a few months’ time to let you know more about the benefits of this change. To find out more about Lit becoming part of CityFibre, visit https://litfibre.com/news/lit-fibre-acquired-by-cityfibre/.

    If you have any questions please get in touch with us (details are below).

    Best wishes

    Tom Williams & Ben Bresler (Co-Founders)”

  12. Avatar photo FF says:

    This is a smart move at the right time

  13. Avatar photo Darren says:

    Looks like a good move. No overlap saves a lot of wastage and disruption too.

    I’m wondering, does Cityfibre give out any details on the 10Gbps upgrade progress or timeline? Or if it’s been paused.

    1. Avatar photo Bob says:

      Lots of cost savings by consolidating Lite Fibres operations into City Fibres

  14. Avatar photo Anonymouse says:

    It would be interesting to see the NAV of each altnet at £400 CPPP.

    On Monday ISPR reported Airband carry £116.41m liabilities (December 2022) with 290k premises (July 2023).

    Their liabilities will have increased between Dec. 2022 and Jul. 2023 to get to the 290k premises, but ignoring this and the fact that 76k are FWA so “only” 215k FTTP, 290k x £400 CPPP = £116m.

    So at £400 CPPP Airband shareholders are swapping a majority holding in Airband to a minority in CF. Probably a sensible move.

    If you factor in the increased liabilities (Dec. 2022 to Jul. 2023) and apportion lower/no value to the FWA element of Airband, £400 CPPP won’t cover all liabilities/shareholders are taking a haircut.

    It would be an interesting article Mark!

  15. Avatar photo cop for this says:

    Consolidation in the altnet market was always inevitable and the bet a couple of years would have been that there would be 3-5 big operators plus a sprinkling of community companies. Whilst the latter may survive it looks like the sector and its gullible investors have been taken for a ride courtesy of the government and OFCOM and altnets will fast become an endangered species. This is looking more and more like a consolidation of two. Openreach and Virgin must be laughing their heads off right now.

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