CityFibre Report 518K UK Full Fibre Customers and Profitability UPDATE
Network operator CityFibre has today published a key trading update for the year ended 31st December 2024 (FY24), which reveals that the coverage of their full fibre (FTTP) broadband ISP network has now reached 4.3 million UK premises (inc. Lit Fibre), with 518,000 live customers, and they also delivered their “first full year of profitability“.
Just to recap. The alternative network operator currently still aspires to cover up to 8 million UK premises with their new full fibre network (funded by c.£2.4bn in equity, c.£4.9bn debt and c.£865m of BDUK / public subsidy) – representing c.30% of the UK. So far, they’ve covered 4.3 million premises and have connected 518,000 customers, although it’s unclear when they’ll hit the 8m target (certainly not by their original 2025 goal).
CityFibre has also won nine state aid funded contracts – worth more than £865m – under the Government’s £5bn Project Gigabit broadband roll-out scheme, which is focused on upgrading the final 10-20% of hardest to reach premises (usually those in rural areas). The operator expects these to help boost their coverage by another c.1.3 million premises. Work is now underway on all of these, with over 20,000 premises RFS delivered to date.
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Interestingly, CityFibre noted how “early take up in Project Gigabit areas [is] even faster than on existing footprint“). Across the areas currently deployed, they are seeing an average of 60% faster take-up when compared to non-intervention areas, which is very good but not too unexpected given that such builds usually focus on locations that haven’t had FTTP before.
The latest results indicate that the operator delivered a “record” 34% increase in revenues to £134m (up from £100m last year), with consumer revenues also increasing by 73% to £76m (up from £44m) and the operator delivering adjusted EBITDA of £5m (up from -£55m) to achieve its “first full year of profitability since starting our scale rollout“.
In terms of their network expansion and take-up, CityFibre has now completed the integration of Lit Fibre’s FTTP infrastructure (c.280,000 premises) into their network and thus reported a total coverage of 4.3 million premises passed (up from 3.6m last year). But the ‘Ready for Service‘ (i.e. those able to actually take the service) figure is lower at 4.1 million, which is up from 3.2m.
Finally, total live customers hit 518,000 (up by 54% from 337,000), although CityFibre noted that they were seeing take-up of over 40% in their mature cohorts (i.e. the oldest city builds).
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Greg Mesch, Chief Executive Officer at CityFibre, said:
“2024 was a definitive year for CityFibre. We achieved our first full year of profitability, signed a new strategic partnership with Sky, which doubled our retail sales capacity, and solidified our position as the UK’s leading independent wholesale network.
As we look ahead to 2025 and beyond, we are confident in delivering accelerated, profitable growth across our expanding platform, with half the UK broadband market now served by our partners. We will also harness our increased participation in government’s Project Gigabit and make the most of a rapidly emerging altnet consolidation opportunity, realising the benefits of infrastructure competition for consumers, businesses and for the UK.”
The operator added that the ongoing roll-out of their new 10Gbps speed XGS-PON network upgrade is “on track to complete mid 2025, ahead of schedule“, although they didn’t elaborate on this. But it might just mean that they will have deployed into 100% of their fibre exchanges (FEX), which is not the same as premises passed. CityFibre told us in October last year (here) that they were “on track to double our XGS-PON footprint to 40% by the end of the year” (RFS premises), yet it’s unclear when that part will also reach 100%.
Otherwise, the new trading update largely focuses more on the company’s positive figures, although it should be noted that they are still carrying a lot of debt and are known to have been seeking fresh investment to help fuel their ongoing roll-out. But today’s update does note that they’ll “complete our financing” during 2025, which suggests that a solution may not be far behind. CityFibre is also still talking about the “rapidly emerging altnet consolidation opportunity,” but it remains to be seen how many other deals like the Lit Fibre one may follow.
Finally, the operator said they planned to deliver their full fibre broadband network to a further 1 million premises in 2025, which would be roughly in keeping with the c.900k they added in the last year. This is also similar to the pace of build being delivered by close rivals nexfibre and Netomnia.
UPDATE 4:06pm
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We’ve got a bit of good news to share regarding the XGS-PON deployment. CityFibre has clarified that they’ve accelerated their entire XGS-PON rollout since they last updated ISPreview in October 2024. “We are on track to upgrade our entire RFS footprint by mid-year 2025, enabling our partners to offer our full multi-gig XGS-PON product portfolio to all premises,” said the operator.
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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That £5m is 0.001% of their debt pile. How much are interest rates again?
Probably a debt for equity swap in the offing, Even if they were only paying BOE base rate they would need to generate £225 million profit to service the interest on their £5bn debt.
Their 2024 accounts won’t be available for some time but their 2023 accounts showed they were paying 2.95-3.85% above the SONIA rate on £3.1bn of debt.
The most recent published SONIA rate was 4.454%.
Still waiting, waiting, waiting for them. The Gloucester build has been trumpeted since 2021, but then they stopped for a year and are only now getting going again. So many promises and so many delays.
Same in Swindon. Leaflet drops and door to door visits a few years ago. However, they came halfway down the road then stopped 🙁
Same in Reading
518,000 live customers with 4.1 million premises ready for service equals a take up rate of only 12%.
I wouldn’t be bragging about that.
@DF
Still more than some, plus remember this is over all so newer areas might be less where as older can be higher as people switch after their long 24 month contracts.
Let’s hope all the paused builds get underway now and it’s onwards and upwards!
I can see little steps made around here now after it stalled near the end of 2023.
I’ve noticed one of their vans apparently working at our local Tesco although they have no other presence in this town (Banbury). Has anyone got any clues?
Sounds like a strong case for deregulation in the market.
I’m surprised that they ‘only’ have 500k live customers, I would have assumed 2-3x that number.
That ratio will improve a lot as they roll out in the fttp deprived rural areas covered by the bduk contracts they’ve won, and with sky, talk talk and Vodafone contracts they’ve got a strong potential customer base as time goes on.
Que all the Cityfibre haters in the comments section.
Please keep it up,I enjoy reading comments from people who want the company to fail and me to lose my job on every article about Cityfibre.
I doubt anyone “hates” CF, nor do they want to see anybody lose their job. But it’s a simple reality that EBITDA isn’t profit, it’s the difference between income and operating costs before allowing for interest, tax, depreciation and amortisation. As noted by somebody else, CF need around £225m to cover debt interest, and there’s around £100m of depreciation and amortisation. It’s good to see the CF business growing, but it’s still a very, very long way from delivering a return on the capital it employs.
I’d like to see them have better uptake, for the build to finish near me and for me to get the email saying service is available, before BT/OR send the same email. CF or UPP were my preference, now that UPP isn’t coming CF is the only symmetrical offering coming my way in the near future.
I’ve been on NTLWorld/VM for most of two decades (I had to leave for a few years when I was getting up to 75% packet loss in the evening, when I had to work sometimes from home, but the 22Mbs that I managed to get from VDSL was almost as painful) and it has not been a whole positive experience, especially since they release more packages but only want to charge me more for them, and only want to charge me more for the same service each year. I miss the days of free upgrades on NTLWorld.
Half the comments are from ex CF staff that were made redundant. That’s where the hatred comes from.
The realty is that they are on track in their business plan. The addition of Sky means they will be marking profit and servicing debt in the next 18 months to 2 years. They are on an exponential curve right now in terms of take up.
@TBC So you’re still been taking in by all the Cityfibre spin.
Can’t you see through it? They’re not making profit because they have a huge debt service which takes up all the income they receive and more.
@DF right now yes because they are in the expansion phase. There are ways to manage debt long-term Big Dave has suggested equity swap. They can also just wait as inflation and higher prices will deal with it. It’s a well trodden path. Why do people think they don’t have a plan and the investors putting up the money don’t know what they are doing. Like with everything there is a risk of failure of course but CF are nowhere close to that point.
Cue the dodgy spelling.
I for one don’t Rate or recommend Open reach fibre Internet I have been waiting since the 21st of December 2024 for them to come out and connect to me. All I keep getting is Taxi is an email saying they are looking into it I find it one big joke Open reach I’ve got to be one of the worst Internet providers I have ever come across I had sky TV and Internet of which open reach are the provider it’s gone beyond a joke I was told in the beginning I will be set up for the 21st of December 2024 I came out set the box up in my house for Sky Tv I am still waiting to be connected to the Internet I have been given a different date when no one has turned up and they only reply I have is they are looking into it I was told I will be out on the 23rd December 27th 29th and then January 2025 was told the 3rd 4 th 6th8th and I’m still waiting Open reach should be ashamed one of the worst Internet provider I have ever come across it is now the 11th of January and I’m told the next date is the 18th of February I give up Ridiculous
Open reach Internet providers disgraceful
If my figures are right, CityFibre is saying that it has become profitable even though it has only achieved 12pc take-up of the fibre-based services from the 4.3mn premises RFS.
They are are basically earning enough to pay the staff, the electricity bill and the rent, but they are not earning enough to service the interest on their debt which is simply being added to their existing debt pile.
@Big Dave
I dug a bit deeper. The figures appear to be a little distorted – possibly due to the recent takeover (with the timespan suggesting the integration is yet to be completed). They are reporting 40pc take-up on their “mature cohorts”, which will put the finances in a lot better shape if they can continue with the new deployments. The figures also do not reflect the recent agreement with Sky.
It has 12% penetration. With Sky you would expect that to rise by 2027 when they are onboarded, assuming there is no churn in customers where there is overbuild.
That uncertainty is why it’s stopped building everywhere that isn’t being subsidised by the public purse. It achieved EBITDA by throwing everything out the window that wasn’t screwed down to land the plane.
Taking that situation into the debt markets in order to acquire companies with even less penetration is going to require giving up an eye-watering amount of equity. I hope for all involved that Nexfibre hurry up and acquire them.
That’s not correct – they’ve restarted building in several non BDUK areas.
Re: Nextfibre – I doubt we’ll see them buying anyone significant.
Nexfibre acquire them? Have you seen the churn figures for Virgin Media? Despite record breaking build numbers VM continue to lose customers every quarter..
I’ve also heard some of nexfibres builds are being reconsidered (much like Cityfibres) due to the poor uptake in certain areas.
CityFibre yesterday re-confirmed that it is aiming to be the third national network in the UK. It also stated that it will double down on M&A this year, saying that the sector is at an “inflection point”.
10% takup is quite depressing after 5 years of building. I always thought FTTP was a case of if you build it they will come. I really think the British public would still be watching VHS tapes if not forced to upgrade to DVD.
12% to be fair, Openreach are achieving 35% take up overall and 50% on mature builds so I don’t think public apathy is the problem, personally I think the fragmented nature of the altnets doesn’t help and also the lack of brand recognition may also not be helping.
Not sure if either of those apply in CityFibre’s case given they don’t sell directly to consumers.
It is actually averaging at 40pc in the established deployments according to the fuller report, with take-up accelerating now that the have started offering XGS-PON based services.
Thanks cityfibre and Mark for the update on the XGS-PON upgrades. Good news at last, looking forward to ordering.
City Fibre are meant to be building in Suffolk but they came to our village a year ago did a load of fibre pulling through ducts and never to be seen again despite a letter dropped through our door, they have no build plan map and are unwilling to talk.