{"id":37153,"date":"2024-02-14T11:00:47","date_gmt":"2024-02-14T11:00:47","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=37153"},"modified":"2024-02-14T11:07:42","modified_gmt":"2024-02-14T11:07:42","slug":"nexfibre-pledge-to-build-more-uk-full-fibre-in-2024-than-any-altnet","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/02\/nexfibre-pledge-to-build-more-uk-full-fibre-in-2024-than-any-altnet.html","title":{"rendered":"Nexfibre Pledge to Build More UK Full Fibre in 2024 Than Any AltNet"},"content":{"rendered":"

The CEO of nexfibre<\/a>, Rajiv Datta, has revealed in a new interview with the CEO of ISP Zen Internet<\/a>, Richard Tang, that they intend to roll-out their full fibre (FTTP<\/a>) broadband network to “more homes in 2024 than any [other] altnet<\/em>” and will shortly pass 1 million homes. But Virgin Media<\/a> (VMO2) remains their only ISP, for now.<\/p>\n

In case anybody has forgotten. Telef\u00f3nica, Liberty Global and InfraVia Capital Partners created a new joint venture called nexfibre<\/strong><\/a> in 2022 (here<\/a>) \u2013 backed by \u00a34.5bn (\u00a31.4bn in equity and \u00a33.1bn in debt) \u2013 that aims to deploy a 10Gbps capable open access full fibre (XGS-PON FTTP<\/a>) network to reach \u201cup to<\/em>\u201d 7 million UK homes (starting with 5 million by 2026).<\/p>\n

NOTE:<\/strong> At the last update in November 2023 (here<\/a>), nexfibre<\/a> revealed that it had so far covered 559,000 UK premises (excluding the 175,000 acquired via Upp<\/a>).<\/div>\n

Both nexfibre<\/a> and Virgin Media<\/a> (VMO2) share the same parentage, although nexfibre<\/a> differs in that their network is open to wholesale (Virgin Media<\/a> is a closed network) and their build is focused on areas NOT currently served by Virgin Media\u2019s own network of 16m+ premises. The approach also enables Virgin Media to expand their reach without Ofcom<\/a> forcing them to open up to wholesale, although VMO2 have long prepared for that too.<\/p>\n

The most recent development saw nexfibre reveal their first full roll-out plan for 2024 (here<\/a>) and we’re expected a progress update on that work to surface within the next week or two. The new interview doesn’t really add much in the way of truly fresh information about the operator’s plans, but it does provide some extra context and a few interesting titbits.<\/p>\n

The Nexfibre Interview<\/strong><\/span><\/h3>\n

For example, Rajiv Datta<\/strong> was keen to stress that they’re “accelerating build<\/em>” at a time when a fair few other alternative networks are being forced to slow their deployments and make redundancies, often due to the current climate (e.g. rising build costs, high interest rates making it difficult to attract fresh investment, aggressive build competition and the related challenge of growing take-up).<\/p>\n

Rajiv added that other alternative networks, aside from the stress caused by “interest rates going up<\/em>“, are also facing a “little bit of credibility issue around the pace at which they’re getting customer connections and penetration, relative to their plans<\/em>“. Of course, it’s entirely possible that nexfibre might eventually run into this too (it’s currently too early to judge), but Rajiv disagrees.<\/p>\n

By comparison, he says nexfibre aim to have “real discipline around our build, so we’re very focused on how we’re building, what we’re building, what our cost of build is, what the best use of that build capex could be, including where we’re building. But the other thing that we’re very focused upon is penetration<\/em>” (VM side helps drive this a lot) – making their business plan work, adds Rajiv, involves “building quickly, but also getting penetration quickly<\/em>.” We suspect AltNets that have been at this game a bit longer would say that’s easier said than done.<\/p>\n

Interestingly, Rajiv predicts that nexfibre somewhat ambitiously expects to “breakeven before we stop build [end of 2026], and that’s pretty quick<\/em>.” Indeed, that would be quite an impressive achievement, given that many other networks typically have a longer time horizon for reaching the break-even point (i.e. the point in a business venture when the profits are equal to the costs).<\/p>\n

Coverage, Wholesale and Consolidation<\/strong><\/span><\/h3>\n

As well as noting that the operator would be “passing a million homes … early this year<\/em>” (if we include Upp’s network, then they’re already close to that level), Rajiv also laid down the gauntlet by pledging that they “will build more homes in 2024 than any altnet in the marketplace … second only to Openreach<\/a><\/em>.” We think that’s likely to be correct, since CityFibre<\/a> are expecting to add 1 million premises this year (partly through consolidation) and nexfibre should be ahead of that (only a very few AltNets, like Netomnia<\/a>, are still deploying at this sort of scale).<\/p>\n

On consolidation, Rajiv said they were open to more acquisitions, like the deal done with Upp. But he was keen to stress that their main plan is still based around build. Put another way, they aren’t pursuing growth through consolidation to the same degree as CityFibre<\/a> seem to be, but they are keeping their options open, where it makes sense.<\/p>\n

Nexfibre’s boss then clarified that they’re focused on building as much of their own physical network (i.e. trenching and new poles) as possible, rather than pursuing the lowest possible cost (PIA heavy). Rajiv complains that the lower cost model leaves too many gaps in coverage, whereas they wish to deliver solid coverage across an area and be less reliant on harnessing Openreach<\/a>’s existing ducts and poles (though PIA still has a big role to play).<\/p>\n

At this point the discussion switches to wholesale, and we learn something new from Richard Tang, who is clearly curious to know when his ISP, Zen Internet<\/a>, might theoretically be able to apply to join nexfibre. Despite Virgin Media already using the new network, Rajiv states that they’re still not quite ready for other ISPs: “We’ve got a few I.T. systems activities that are ongoing, which we expect will be complete within the coming months that will allow us to actually physically bring customers [ISPs] on to the network<\/em>.”<\/p>\n

However, this is often only part of the onboarding challenge, since much will depend upon what kind of product and terms nexfibre are able to offer and the divisive issue of exclusivity agreements. Navigating this side of things and being fair to all partners is a very tricky aspect to get right. Rajiv adds that the discussions on how they can leverage wholesale and adopt the “right model<\/em>” is “happening now<\/em>” and he says they’re looking forward to doing that with Zen (possibly).<\/p>\n

Finally, Rajiv notes that nexfibre effectively arrived a little bit too late to take part in the Government’s Type B (regional) subsidy contracts under the \u00a35bn Project Gigabit<\/strong> broadband roll-out programme. But the operator does still find the project “quite interesting<\/em>” and are keeping an open mind to any opportunities for complementary contracts in the future, although they’re more focused on the semi-urban and semi-rural style areas.<\/p>\n

Readers can check out Richard\u2019s interview series here<\/a>, and we\u2019ll paste the latest video below.<\/p>\n