{"id":20060,"date":"2020-01-21T08:07:03","date_gmt":"2020-01-21T08:07:03","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=20060"},"modified":"2020-02-05T12:26:08","modified_gmt":"2020-02-05T12:26:08","slug":"cityfibre-buy-fibrenation-and-set-8-million-uk-ftth-homes-goal","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/01\/cityfibre-buy-fibrenation-and-set-8-million-uk-ftth-homes-goal.html","title":{"rendered":"Cityfibre Buy FibreNation and Set 8 Million UK FTTH Homes Goal"},"content":{"rendered":"

UK ISP TalkTalk<\/a> has today confirmed that their wholesale full fibre (FTTH<\/a>) broadband network sibling – FibreNation<\/strong><\/a> – has been sold to the Goldman Sachs backed Cityfibre<\/a> for \u00a3200m cash. In response Cityfibre<\/a> has increased their fibre optic roll-out plan from 5 million UK premises by 2025 to 8 million.<\/p>\n

Just to recap. FibreNation<\/strong><\/a> is the open access wholesale network sibling of TalkTalk<\/a>, which since its creation last year has held a long-term aspiration of covering 3 million premises across the United Kingdom with a 1Gbps Fibre-to-the-Home<\/strong> (FTTH<\/a>) broadband network.<\/p>\n

NOTE:<\/strong> FibreNation has so far been focused upon the Yorkshire region, where they’ve already invested \u00a360m.<\/div>\n

Excluding their existing rollout to c.50,000 premises in York, FibreNation recently started its next deployment to 61,000 premises in Dewsbury<\/strong> (here<\/a>) and they aimed to cover 100,000 premises across Harrogate<\/strong>, Knaresborough<\/strong> and Ripon<\/strong> in the future. However to reach the dizzy heights of 3 million premises they needed to raise around \u00a31.5bn and so far that’s proven to be somewhat of an obstacle.<\/p>\n

Initially TalkTalk<\/a> appeared to have a backer for their big deployment strategy – Infracapital<\/strong> – but they pulled out<\/a> at the end of 2018 due to a disagreement over the value of the FTTP<\/a> network and there were concerns that other investors could potentially run into a similar obstacle.<\/p>\n

Since then TalkTalk’s sibling has attracted some interest from possible investors (here<\/a>) and there were also rumours of a potential sale to Cityfibre<\/a> (here<\/a>), at least until the Labour Party pledged to deliver a free full fibre network to all and thus nearly scuppered the deal (i.e. it threatened to destroy the current commercial ISP market, causing private investors to pause).<\/p>\n

Nevertheless Cityfibre has now reached an agreement to buy the business and as part of that they intent to add FibreNation’s ambition for 3 million FTTH<\/a> premises to their own roll-out strategy, which is currently in the process of investing \u00a32.5bn to cover 1 million premises across the United Kingdom by the end of 2021 (Phase One) and then 5 million by the end of 2025 via 60 UK cities and towns (here<\/a>).<\/p>\n

On the flip side TalkTalk can reduce its debt pile and has agreed to join Vodafone<\/a> as a long-term retail ISP partner on Cityfibre’s full fibre network. We should point out that in the areas not served by FibreNation, TalkTalk still intends to harness FTTP<\/a> services from Openreach<\/a> (BT<\/a>) and potentially other suppliers (here<\/a>).<\/p>\n

Tristia Harrison, CEO of TalkTalk, said:<\/strong><\/p>\n

“We are pleased to announce today\u2019s agreement with CityFibre, which is good news for TalkTalk, and good news for Britain and its full fibre roll-out ambition. Our investment over the last five years and the excellent work delivered by the FibreNation team, combined with CityFibre\u2019s well- established platform, will support wide-geographic reach of full fibre and further drive competition in the market.<\/p>\n

The sale of FibreNation to CityFibre, in combination with a competitive wholesale agreement, enables us to continue our strategy to accelerate TalkTalk\u2019s fibre growth for our residential and business customers, thereby delivering a superior customer experience at an affordable price.”<\/p><\/blockquote>\n

Greg Mesch, Chief Executive of CityFibre, said:<\/strong><\/p>\n

“Digital connectivity has the power to transform our country into a nation of smart, connected towns and cities, boosting and levelling up our economy.<\/p>\n

Today\u2019s announcement establishes CityFibre as the UK\u2019s third national digital infrastructure platform allowing millions more consumers and businesses to benefit from access to faster, more reliable services.<\/p>\n

The UK is a service-based economy, and this runs best on full fibre. Ensuring national coverage is critical and this can only be achieved by driving infrastructure competition at scale. This deal demonstrates the appetite from industry to see it established.”<\/p><\/blockquote>\n

The addition of FibreNation’s roll-out plan to Cityfibre’s existing programme is an interesting one, not least since FibreNation’s long-term strategy was never fully funded and we’ve always assumed that with projects this big there would be some large areas of overbuild between the two plans. Unfortunately FibreNation has never released a long-term deployment plan and so it’s impossible to know for sure.<\/p>\n

Otherwise today’s deal wouldn’t have been possible without Cityfibre’s existing ISP partner, Vodafone<\/a>, agreeing to add some flexibility to their existing contract (softer exclusivity arrangements). At present Vodafone<\/a> gets exclusive access to the new FTTH, at least until each city build completes, although they must in-turn deliver a certain level of take-up (not easy to do).<\/p>\n

Under the new agreement with Cityfibre, Vodafone will offer their related Gigafast Broadband packages on a rolling, 12-month exclusive basis as homes become available for service in each of the 12 towns and cities covered in phase one of the deployment. Previously, the period of exclusivity was dependent on the total time taken to roll-out the network in each city.<\/p>\n

NOTE:<\/strong> Vodafone recently moved to take Openreach<\/a>’s FTTP<\/a> service too, which without today’s deal might have looked awkward for Cityfibre (here<\/a>).<\/div>\n

In addition, Vodafone said they are backing a new trial in Salisbury in which Openreach<\/a> (BT<\/a>) will replace every copper-based telephone line within the catchment area with superior and more reliable optical fibre cables (here<\/a>). Starting in the spring, Vodafone has agreed to migrate its customers in the area to Vodafone Gigafast Broadband (via Openreach’s FTTP) without charging an upfront connection fee.<\/p>\n

Vodafone UK CEO, Nick Jeffery, said:<\/strong><\/p>\n

“Vodafone is in a unique position to drive forward full-fibre deployment in the UK. By offering our partners a ready market in the form of Vodafone Gigafast Broadband, we played an instrumental role in encouraging Openreach\u2019s new wholesale service to build in additional places, and now we are enabling CityFibre to expand.<\/p>\n

The only way the UK will achieve its digital ambition is through strong partnerships, and Vodafone is leading the way.”<\/p><\/blockquote>\n

Assuming Cityfibre can now deliver on their roll-out ambition then that may help the Government toward their goal of nationwide “gigabit-capable<\/em>” coverage by the end of 2025, although most of their build will be urban and thus we expect lots of overbuild with Virgin Media<\/a> and Openreach (i.e. not much of an overall improvement in gigabit coverage).<\/p>\n

The deal suggests that Cityfibre’s investors will pledge an extra \u00a31.5bn<\/strong> to help reach the new roll-out target of 8 million premises passed (\u00a34bn total investment<\/strong>). As a result the company now also estimates that up to 7,000 construction jobs outside London will be created at the project\u2019s peak (i.e. fibre engineers).<\/p>\n

We should add that Sky Broadband<\/a> were a wholesale ISP partner with FibreNation (i.e. the ‘Ultra Fibre Optic’ branding) and they remain there under the new deal, albeit limited to FibreNation’s old terms (a new deal may be required before Sky jump fully into bed with Cityfibre). Lest we forget that the new flexibility means that more ISPs will now be able to sell services via Cityfibre’s network, thanks to Vodafone agreeing to relax their terms.<\/p>\n

Cityfibre has also struck an extensive wholesale agreement with TalkTalk for business services. TalkTalk and CityFibre will now begin systems integration in preparation for the future launch of TalkTalk’s full fibre services. As usual the sale is conditional upon shareholder approval (most have already given a commitment to support it) and completion is targeted to occur in March 2020.<\/p>\n","protected":false},"excerpt":{"rendered":"

UK ISP TalkTalk has today confirmed that their wholesale full fibre (FTTH) broadband network sibling – FibreNation – has been sold to the Goldman Sachs backed Cityfibre for \u00a3200m cash. In response Cityfibre has increased their fibre optic roll-out plan from 5 million UK premises by 2025 to 8 million.<\/p>\n","protected":false},"author":1,"featured_media":20061,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1,1645],"tags":[472,418,65,56,66,74,96],"class_list":["post-20060","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","category-key_uk_isp_industry_developments","tag-business","tag-cityfibre","tag-ftth","tag-fttp","tag-sky-broadband","tag-talktalk","tag-vodafone"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nCityfibre Buy FibreNation and Set 8 Million UK FTTH Homes Goal - ISPreview UK<\/title>\n<meta name=\"description\" content=\"UK ISP TalkTalk has today confirmed that their wholesale full fibre (FTTH) broadband network sibling - FibreNation - has been sold to the Goldman Sachs\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/01\/cityfibre-buy-fibrenation-and-set-8-million-uk-ftth-homes-goal.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cityfibre Buy FibreNation and Set 8 Million UK FTTH Homes Goal - 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