Brsk and Netomnia Agree Large UK Full Fibre Broadband Merger
As first rumoured on these pages during April 2024 (here), two of the markets largest alternative UK network operators – Netomnia (YouFibre) and Brsk – both of which have deployed a significant amount of Fibre-to-the-Premises (FTTP) broadband ISP infrastructure to cover UK homes and businesses, have today formally agreed to merge.
Firstly, some context. Brsk is currently the smallest of the pair and have, thus far, been fuelled by an investment of at least £259m (mostly via Advencap and the Ares Management Corp), which has enabled them to cover 552,000 premises (536,000 Ready for Service) in England. The operator sells packages to consumers under the same brand (they have 41,200 customers) and, until today, were aiming to pass 1 million homes by 2026.
On the other side we have Netomnia, which is easily the largest of the two operators, having already covered almost 1 million premises and raising £795.5m of investment in the space of just three years (via Advencap, DigitalBridge and Soho Square). The operator, which sells its packages to consumers via sibling ISP YouFibre (they had 80,000 customers in March 2024), also held a tentative ambition to reach up to 2 million premises by the end of 2025 (1.5m is already planned).
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However, the pair have long been linked to speculation about a possible consolidation, which is partly due to the fact that they share one of the same investors. In addition, both operators have managed to avoid overbuilding each other, and appear to share a similarly capital-efficient approach to build, which harnesses as much of Openreach’s existing cable ducts and poles (PIA) to run new fibre as possible (Netomnia spends an average of £250 per premises passed).
The newly merged group will thus have a combined network footprint of 1.5 million premises (RFS) and a customer base of 140,000 immediately post-merger, with a target of reaching 3 million premises (coverage) by the end of 2025.
Jeremy Chelot, CEO of Netomnia, said:
“By merging our network expertise and resources, we are creating a powerhouse to deliver an unparalleled internet experience for our customers, driving innovation and further consolidation among altnets. The additional capital from our investors and support from our lenders is a powerful endorsement of our vision and ability to execute at the highest level.”
Giorgio Iovino, CEO of Brsk, said:
“The merger is a testament to our shared entrepreneurial spirit and experienced teams that can deliver even more. Together, we are set to deliver a fibre network that is not only fast and reliable but also future-proof, ensuring our customers benefit today and tomorrow. Our joint platform will be where the most powerful internet lives.”
The official announcement notes that Netomnia and Brsk have already used £300m of debt and they “plan to use up to £900m of debt to grow the footprint to 3 million premises, demonstrating the companies’ prudent approach to capital management“.
Just for context, since 2020, Netomnia and Brsk have raised over £1.3bn of capital, with support from investors Advencap, DigitalBridge, and Soho Square Capital. DigitalBridge and Advencap will now be committing additional equity funding as part of today’s news.
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The merger is set to be finalised in the coming weeks, pending regulatory approval (this will not be an obstacle), enabling customers to benefit from an “alternative FTTP platform that offers a seamless network experience, unified pricing, and enhanced service quality across the shared footprint.”
The deal will create one of the market’s largest Altnets, which will be much more readily able to challenge the leading players in this space, such as CityFibre, CommunityFibre and Hyperoptic. In addition, the combined entity creates a much more attractive wholesale option for ISPs, since scale is often a key factor for some providers when planning to invest in supporting a new network.
The newly merged entity will be led by Netomnia and YouFibre’s existing boss, Jeremy Chelot, as Chief Executive Officer (CEO) and Wil Wadsworth as Chief Financial Officer (CFO). Giorgio Iovino and Ian Kock will remain as CEO and Chief Operating Officer (COO), respectively, of Brsk.
Finally, I’d like to apologise for being slower than usual to cover this development, but even yours truly needs time off and a 1pm press release on Saturday tends to clash with lunchtime alcohol consumption and chaotic family life 🙂 .
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UPDATE:
The private equity group at national law firm Freeths is said to have advised the Substantial Group management team on its merger with Brsk.
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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Sorry for the Saturday release!
Congrats, best of luck all involved! Ha caught Mark off guard today
It was 3PM local time when I saw the press release over in Turkey (while on a beach)(on 1Mbps if lucky and pointing phone in the right direction), definitely missing 1Gbps, looking forward to see how it all goes.
Oh dear…
Makes sense. Advencap have a stake in both. Merge the two together. Cost cut.
The end is near
Infracapital likely to do the same thing soon; Gigaclear, Ogi, Fibrus and Wight Cable.
What blows my mind is that Neos can’t (or won’t) access what is effectively their owners (Gigaclear, Ogi, Fibrus and Wight) fibre either to do tails or knit backbone. Crazy, Insane, Mad. I would have a small gang of folks on that tomorrow – shared common backbone network run by neos with the various altnets just being normal ‘customers’ would be the easy part. Every fibrus, gigaclear, etc pop is now a neos pop able to sell services including dark fibre tails in many cases.
Makes future access network harmonisation easier but still allows them to be independent entities focused on growth rather than merging ….for now.
Yes.
What is the point in merging if there’s no benefit i.e cost saving? Advencap may aswell keep them both separate if there wasn’t.
Interest rates are high. It’s affecting them. Hence this move.
More and more useless company, Netomnia.
Pulling cables same place twice (PE13 3TL). Over 2 years unable to get job done, just promises…
Just saying, soon, soon, all together for 3 years.
So, Jeremy, what a point to start job and never get it done? Or You will stick with easy installation and when smallest issues, stop building?
In a similar boat with Green Lane, Temple Ewell, Dover.
Letter from Netomnia saying they were coming and my address would be done along with their online checkers saying same thing for months. Fast forward and the road opposite has it, less than a stone’s throw away, and Green Lane hasn’t been done with no explanation.
All I can say is they will probably get there, but waiting on BT to resolve some part of the infrastructure before they proceed. As money is limited with AltNets, to meet their expenditure per house, anything that has issues is parked. From what I can gather, Netomnia like to use existing BT routing of cables and not deviate. In my case, a new telegraph pole hidden in an alley could have linked the road with fibre to my road with fibre, but I am thinking that they would want to follow the original BT route into my road.
So, they probably will get to you, just a waiting game. I’m hoping when BT do FTTP this year that Netomnia follow behind very soon after; that’s what I am waiting for. If I thought it would speed their roll-out up to my road, I’d happily take the £99/month service for first 2 years as that must be equivalent to 3.3 houses signing up to the 1gbps service…
On the news of the merger I think it makes sense given where the funding was from for both companies and it helps to make Netomnia bigger without taking on horrendous debt of a company that had overbuilt. Thing is to advertise their services in cheap media because a lot of people don’t know they are in an area or that upload and download speeds are the same unlike BT.
Their money. You aren’t entitled to have it spent building to you.
From what I’ve seen the current industry view is that there will be 2-4 altnets by the end of the decade (plus Openreach and VMO2/Nexfibre). Those who move earliest will have the best chance of still being in the game.
Max 2, most likely only 1 with scale 🙂
@mark, existing 40k and 80k customers surely totals ~120k, not 140k today? It’s not your fault, let’s blame the lunchtime alcohol 🙂
It’s an issue of timing, hence why I put a date on some of the figures, because Netomnia’s 80k figure is much older than the Brsk one, so there’s been some catch-up since then. Plus you have to allow for rounding.
Both on only 8-10% take-up doesn’t bode well for long-term profitability.
No rounding, YouFibre is well above the 100k and Brsk well above the 40k…we will break the 150k at the end if this month!
This makes them the #2 altnet with a better build rate than #1 city fibre. So a matter of time. Also amazing they are committed to no redundancies
They are? That’s fantastic news, as a BRSK customer my main concern was that a merger would mean redundancies which would directly affect the moral of the staff providing such a customer focused service
The numbers in the release don’t agree agree with that. The combined ambition is 3m by the end of 2025 CityFibre are already beyond this and growing with acquisition and build
Which brand name will remain? As a Brsk customer myself I have a bias to the name “Brsk”
It’s right there in the article bro. Both networks will remain
Going forward would be interesting to see a merge with Community Fibre as they have very little overlap and would double the size of the footprint
This is the way, with Community Fibre they would equal City Fibre and then Fibrus + Gigaclear
Maybe! Cityfibre only able to afford or interested in distressed assets so will buy G.network, I reckon 50/50 between CommunityFibre going to Nexfibre or Jeremy’s rebel alliance (hopefully the latter!).
Hyperoptic don’t have an obvious buyer (if openreach weren’t openreach then I think they’d be the closest fit – they’re in desperate need of a serious MDU department). Maybe they’ll survive on thier own, or could be a second choice for netomnia.
What is this fanfiction nonsense? Cityfibre actually make money and still have a significant chunk of their investment pot to go after acquisitions.
Cityfibre has far too much debt to make money, that’s why they went through several rounds of redundancies and they cut their build rate. That’s not a sign of a healthy business
Cityfibre will survive but they do not currently make money. I didn’t say they were a bad or failing business, not at all, but they’re only buying companies that are struggling – that’s just true. It doesn’t make it a bad strategy, but I don’t they’ve the money to buy for example communityfibre, they’d be looking at around a billion on a cash free debt free basis.
Like I said, they already reached profitability. It was literally posted on this site, keep up.
A bit gutted to be in a gap of planned service on the Falkirk/West Lothian border. One day they might look to fill that hole and have some contiguous coverage.
So long cheap symmetric fibre with good customer service.
Hopeful that Netomnia will be passing my parents address, although their website is quite unclear :/
Tomorrows headline today: ”
BT Warns Brsk and Netomnia Merger to Damage Competition, Cause Higher Prices
”
Seriously, congrats Jeremy.
🙂
It’s clear to me when cityfibre say they see an acquisition and bduk based route to target numbers ,this is stars aligning, altnets know it’s coming so need to be attractive to get beat price for when the day comes , I could be wrong it could be vice versa but cityfibre still have a huge pot , still have massive investment , still have drive to reach there targets , negatives around layoffs etc is exactly what is required when there’s a move build to operational model
The purse strings at Cityfibre were held tight until they achieved operational break even, hence the redundancies and slow down of build.
I suspect this year all they will do is acquisition and potentially some WIP builds that are 70% complete and just need cabled/spliced.
Feels like Advencap are consolidating their investments in readiness for a packaged up M&A deal, most likely to City Fibre, possibly NexFibre?
Admirable as it seems to commit to no redundancies and retaining both management teams it makes little sense in reality unless it’s only a temporary before a bigger sell off where someone else can do the dirty work?
Is was a merge of infrastructure so yes they can still be management for Brsk ISP as it still exists and not a chance Jeremy is selling to City Fibre or NexFibre hah
Netomnia, Brsk, and YouFibre are growing very fast and therefore there is not reason to impact the engines to make them slightly more efficient. I know, it is hard to understand but 3 great companies getting together to be even better!
“therefore there is not reason to impact the engines to make them slightly more efficient.”
There was no need to merge then was there?!
Netomnia going after anyone else? Full Fibre Ltd is the one I’m keeping my eyes on… Seems to have little to no overlap with either so I think would be a good fit.
Would give them lots of partners with a relationship to FFL, who can then wholesale over BRSK & Netomnia potentially opening those smaller ISPs up to much more customers. Though not sure how the partners would feel with YouFibre & Netomnia integration.
Netomnia and brsk merger
brsk’s merger with Netomnia raises the question of whether brsk have overstretched themselves financially, or whether their profit forecasts are being shown to be over-optimistic.
When brsk approached me last year promising Fibre to the Prerinses (FTTP) at an affordable cost, and further promising deployment underground, I was happy to show my interest. There followed the expected bombardment of marketing emails and intense social media activity. However, when I was again approached on my doorstep and shown on a tablet a photo of my front drive, complete with superimposed 33 foot telegraph pole in position, I was, and I think understandably, appalled.
The representative was informed in clear terms that I would not allow such a pole to be installed on my property, nor anywhere close by. I asked about the promise of underground installation to be told that ducts were either full or concreted over, or not available for “commercial” reasons. Contacts with ex-BT underground infrastructure engineers soon identified the first two reasons to be false. It was also suggested that Gigabit over copper was unreliable and did not compare to using fibre. As an IT professional, now retired, of over 50 years’ experience, I have implemented gigabit over copper in a variety of environments with no performance issues, thus discrediting their suggestions. I do understand that fibre does offer some advantages over copper.
Letter and emails subsequently flowed between my local MP and councillors for Amblecote, and also the brsk’s Managing Director and various other addresses within the company, expressing disillusionment withs brsk’s proposals for using telegraph poles. The letters to Giorgio Iovino went un-acknowledged and unanswered. Other replies from brsk simply repeated their previous reasons for using telegraph poles and failed repeatedly to deliver answers to specific question or requests for face-to face meetings. More letters and messages to MPs, councillors and brsk followed. Questions were raised in the House of Commons about similar brsk activities in nearby Halesowen. The statements that existing infrastructure must be used made by Julia Lopez appears to have been ignored.
Then notices appeared on almost every lamp post throughout the Amblecote neighbourhood advising of the imminent installation of telegraph poles across area. There was a very substantial community response. Petitions quickly gained over 1400 signatures opposing the installation of telegraph poles, representing 93% of the people in the area. When details of the installations were published, the entire community reacted. Cars were parked, legally, to obstruct pole installation, and people congregated at the same sites. Maps of proposed installation shows that dozens of poles were planned, the map looking like a child’s face with severe chickenpox. brsk’s response was to state that the poles were infill for difficult to reach areas, clearly stretching the truth more than somewhat.
An eminently practical alternative to telegraph poles using “Toby Boxes”, similar to those used for water meters, has been presented to brsk, so far with no comment back. All plans for telegraph poles have now been abandoned, with news of the merger surfacing a few days later.
brsk’s original appearance was, I believe, warmly accepted in an area where we are poorly served in respect high speed broadband, only low speeds available with BT/Sky or extortionately expensive, but fast and reliable, Virgin Media. brsk’s treatment of the concerns of local residents has been arrogant and dismissive. Their brand image has, therefore, become rather toxic, and they have alienated many prospective consumers of their service.
Kind regards
David Dewick