Altnet UK Broadband ISP Zzoomm Reportedly Appoint Merger Advisors
Oxfordshire-based alternative full fibre operator Zzoomm, which has deployed their 2Gbps Fibre-to-the-Premises (FTTP) broadband ISP network to cover 202,000 premises (RFS) in England, have reportedly accelerated their plans for an M&A (Mergers and Acquisitions) drive with the appointment of Acuity Advisors to help identify prospective deals.
Just to recap. Zzoomm’s network, which is home to 30,000 customers (c.15% take-up), is currently present across around 29 market towns and small urban communities in parts of Berkshire, Oxfordshire, Herefordshire, Yorkshire, Staffordshire, Wiltshire and Cheshire. But the provider originally aspired to cover 1 million premises across 85 UK towns by the end of 2025, before the difficulties of raising fresh capital forced their build to stop (here and here).
However, despite the challenges, the provider’s CEO, Matthew Hare, recently expressed a strong desire to achieve their 1 million premises target via a different approach. “If we can’t build it ourselves then … you have to buy it,” said Matthew in July 2024 (here) before confirming that they “absolutely are” on the acquisition trail as a means of achieving their original coverage aspiration.
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Matthew Hare, Zzoomm’s CEO, said:
“Stopping the build is all about availability of capital, it’s not about availability of opportunity or aspiration … 1 million premises is still a good target to get to as a footprint, and probably even a bigger number, but if we can’t build it ourselves then we’ll have to find another way of getting there. The aspiration is absolutely still there”.
The first details of this drive now appear to have surfaced after Sky News reported that Zzoomm had hired Acuity Advisors, a specialist technology firm, to identify prospective acquisitions. The altnet is already said to have engaged in discussions with a number of similar network operators in the same space, although realistically it could be months before we learn whether this effort is going to bear fruit.
Separately, the same article also alleges that CommunityFibre recently made an offer worth around £300m to acquire rival altnet G.Network in London, but were rebuffed. This follows news in July 2024, which suggested that G.Network was once again hunting for a buyer (here). CityFibre is also understood to have been sniffing around both operators and has expressed its own strong desire for M&A activity (here).
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.
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My money’s on Cityfibre buying them.
They have big money troubles themselves , just adding more debt to themselves if they did
The problem appears to be (the view of Trooli’s Andy Conibere) is that a lot of altnets are effectively in a position of negative equity with their builds so are unlikely to be able to sell without taking a haircut on their investment. That is probably why we haven’t seen the much touted “great consolidation”.
But surely the longer they leave it, the worse their situation will be?
With some altnets not even bringing enough income in on revenue from customers to service debt + expenses on running the network (this is excluding any build work which a few have stopped anyway), will this be a sustainable position for the altnets in this position to maintain?
> a lot of altnets are effectively in a position of negative equity with their builds so are unlikely to be able to sell without taking a haircut on their investment
Then they’ll be doing equity swaps rather than cash deals. (i.e. “I trade my share in this worthless altnet for a share in a larger and slightly less worthless altnet, because it has more of a chance of making a return in the long term”)
@NE555
Correct, the only problem with equity swaps is that they’re a lot more complicated to set up than straight cash buyouts.
@James
That’s why the altnets have been concentrating on getting more customers on to the network because more cutomers = more value in the network.
zzoomm are running out of cash.
They basically had. Oaktree had to chuck some more cash at them recently.
If anyone has been reading the comments from myself, Big Dave and others against the last few Zzoomm ispreview articles then this will be no surprise!
They should just join Netomnia and Brsk, all their builds compliment like a glove
+ Full Fibre ltd.
Zzoomm/Netomnia/BRSK and FFL would give them about ~2.18mill RFS
There’s a good amount of providers who are not on the same footprint, so should be able to get a high RFS for Netomnia (if they are the ‘main’ brand that sticks).
Not bad considering the price it took for Cityfibre to get to 3.6mill RFS
Seems a viable option.
Lots of ex-Gigaclear folk at NO/YF + BRSK doing a great job.
But…
NO/YF + BRSK can build Zzoomm’s 202k RFS for about £60m.
Zzoomm’s investors and debtors are £225m in currently.
Unless Oaktree + banks are going to take a 75% haircut how’s it going to happen.
But 25% of something plus potential upside is better than 100% of nothing…
Zzoomm is available where I live, but Zzoomm don’t resell their network via other providers, hence why I’ve used Aquiss and Vodafone via openreach, and take whichever is the cheapest deal at the end of the contract period. If Cityfibre were to take Zzoomm over and start reselling their network via Vodafone, Aquiss, etc…. I’d happily move over, but for me the closed altnet model for some networks just doesn’t work.