{"id":35169,"date":"2023-07-24T08:33:12","date_gmt":"2023-07-24T07:33:12","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=35169"},"modified":"2023-07-24T09:40:05","modified_gmt":"2023-07-24T08:40:05","slug":"cityfibre-targets-uk-altnet-acquisitions-despite-big-losses","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/07\/cityfibre-targets-uk-altnet-acquisitions-despite-big-losses.html","title":{"rendered":"CityFibre Targets UK AltNet Acquisitions Despite Big Losses"},"content":{"rendered":"<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">CityFibre<\/a>, which is rolling out a 10Gbps capable full fibre (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>) broadband ISP network across the UK, has published their annual accounts to the end of 2022 and revealed that their losses nearly doubled. But their network coverage also doubled to 2.2 million homes (RFS) and live consumer connections surged to 174k (up from 61k).<!--more--><\/p>\n<p>The operator&#8217;s Fibre-to-the-Premises (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>) network has so far covered over 2.9 million UK homes, although they&#8217;re only &#8220;<em>Ready for Service<\/em>&#8221; (RFS) to consumers at 2.5m of those (note: the figures in their annual report are older and thus smaller). <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">Cityfibre<\/a>&#8217;s aim is to cover up to 8 million UK premises (funded by c.\u00a32.4bn in equity and c.\u00a34.9bn debt) &#8211; across over 285 cities, towns and villages (c.30% of the UK) &#8211; by the end of 2025 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2021\/03\/cityfibre-name-279-uk-areas-for-4bn-gigabit-broadband-rollout.html\">here<\/a>).<\/p>\n<div class=\"bq2\"><strong>NOTE:<\/strong> Multiple retail ISPs, such as big names like <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/vodafoneuk\" rel=\"nofollow\" target=\"_blank\">Vodafone<\/a> and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/tt\" rel=\"nofollow\" target=\"_blank\">TalkTalk<\/a>, access this network via wholesale and then sell packages to consumers.<\/div>\n<p>At this point, it should hopefully go without saying that alternative networks, particularly those that are deep into the rapid rollout phase of an expensive new network, will be burning a heck of a lot of money to build their networks &#8211; often based on an expectation of long-term payback (this can take 10-15 years to realise).<\/p>\n<p>Nevertheless, the ability to conduct this as efficiently as possible and to then deliver good take-up is important (the latter takes a lot of time to grow). The operator&#8217;s <a href=\"https:\/\/find-and-update.company-information.service.gov.uk\/company\/09759465\/filing-history\" target=\"_blank\" rel=\"noopener\"><strong>latest annual accounts<\/strong><\/a> reveal that they ended 2022 in somewhat of a mixed position, with good network growth (2.2m RFS homes in 2022 vs 1.2m in 2021) and sharply rising take-up (174.4k consumer connections vs 60.9k).<\/p>\n<p>On the flip side, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">CityFibre<\/a> also saw operating losses more than double to \u00a3114.8m (2021: \u00a342.3m) and the cost of servicing the company&#8217;s debts has also more than doubled (mainly due to them now holding a much larger debt pile after last year&#8217;s<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2022\/06\/cityfibre-sign-gbp4-9bn-debt-raise-to-boost-uk-full-fibre-rollout.html\"> \u00a34.9bn debt raise<\/a>). You can see a summary from some of the key points below.<\/p>\n<div align=\"center\"><img decoding=\"async\" class=\"ngg-singlepic ngg-none\" style=\"padding: 0px; width: 90%;\" src=\"https:\/\/www.ispreview.co.uk\/wp-content\/gallery\/2023-uk-internet-statistics\/CityFibre-Accounts-to-Dec-2022.png\" alt=\"CityFibre-Accounts-to-Dec-2022\"><\/div>\n<p>The figures help to explain why CityFibre &#8211; supported by investment from the West Street Infrastructure Fund (Goldman Sachs), Antin Infrastructure Fund, Interogo Holdings and Mubadala &#8211; began a new restructuring process at the start of 2023 that resulted in the loss of around 400 jobs and impacted their pace of build (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/02\/cityfibre-restructures-to-keep-uk-fttp-plan-on-track-cuts-400-jobs.html\">here<\/a>). Not long after that it was reported that VMO2 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/vm\" rel=\"nofollow\" target=\"_blank\">Virgin Media<\/a> and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/o2uk\" rel=\"nofollow\" target=\"_blank\">O2<\/a>) had also held &#8220;<em>initial talks<\/em>&#8221; over the possibility of mounting a \u00a33bn takeover bid for the operator (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/03\/virgin-media-o2-uk-ponder-3bn-acquisition-of-rival-cityfibre.html\">here<\/a>).<\/p>\n<p>CityFibre is naturally under many of the same pressures as almost everybody else in the market, such as rising build costs, competition (aggressive pricing and overbuild by rivals etc.) and need to generate a viable level of take-up in order to satisfy investors. But despite these pressures and the fact that they&#8217;re not expecting to turn a profit until 2025, the operator&#8217;s COO, <strong>Simon Holden<\/strong>, told the Sunday Telegraph that they&#8217;re &#8220;<em>happy where we are and we\u2019re confident in our plan<\/em>&#8220;.<\/p>\n<p>A week ago we queried whether the operator still expected to be &#8220;<em>substantially completed<\/em>&#8221; (a vague term that allows some flexibility on targets) on their 8 million premises target by 2025 and were told that remained the plan. The operator also signalled to us that, despite being a potential consolidation target themselves (VMO2 \/ <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/nexfibre\" target=\"_blank\">nexfibre<\/a>), they are also looking to grow their coverage through further acquisitions or partnerships (apparently, they have an interest in up to 20 potential altnets).<\/p>\n<p>Naturally, if they do pursue multiple acquisitions, then it&#8217;s likely to be from operators with only minimal overlap with their own network. Possible options on the list could be <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/hyperopticfibre\" rel=\"nofollow\" target=\"_blank\">Hyperoptic<\/a>, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/netomnia\" target=\"_blank\">Netomnia<\/a>, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/gigaclear\" rel=\"nofollow\" target=\"_blank\">Gigaclear<\/a>, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/toob\" rel=\"nofollow\" target=\"_blank\">toob<\/a> and others. But history does show that negotiating a viable deal for such things can be difficult, particularly if the sellers have an inflated view of their network&#8217;s true value (i.e. sometimes it&#8217;s better to wait for a business to get into trouble before stepping in with an offer).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>CityFibre, which is rolling out a 10Gbps capable full fibre (FTTP) broadband ISP network across the UK, has published their annual accounts to the end of 2022 and revealed that their losses nearly doubled. But their network coverage also doubled to 2.2 million homes (RFS) and live consumer connections surged to 174k (up from 61k).<\/p>\n","protected":false},"author":1,"featured_media":31970,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[472,418,56,34],"class_list":["post-35169","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-business","tag-cityfibre","tag-fttp","tag-statistics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>CityFibre Targets UK AltNet Acquisitions Despite Big Losses - ISPreview UK<\/title>\n<meta name=\"description\" content=\"CityFibre, which is rolling out a 10Gbps capable full fibre (FTTP) broadband ISP network across the UK, has published their annual accounts to the end of\" \/>\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\/2023\/07\/cityfibre-targets-uk-altnet-acquisitions-despite-big-losses.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CityFibre Targets UK AltNet Acquisitions Despite Big Losses - 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