{"id":37788,"date":"2024-04-15T10:16:38","date_gmt":"2024-04-15T09:16:38","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=37788"},"modified":"2024-04-15T10:16:38","modified_gmt":"2024-04-15T09:16:38","slug":"hints-of-large-uk-broadband-merger-between-netomnia-and-brsk","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/04\/hints-of-large-uk-broadband-merger-between-netomnia-and-brsk.html","title":{"rendered":"Hints of Large UK Broadband Merger Between Netomnia and Brsk"},"content":{"rendered":"

Industry sources have indicated to ISPreview that two prominent alternative network operators, Netomnia<\/a> (YouFibre<\/a>) and Brsk, both of which have deployed a significant amount of Fibre-to-the-Premises (FTTP<\/a>) broadband infrastructure to cover UK homes and businesses, could be set to merge their networks in the near future.<\/p>\n

Netomnia<\/a> is currently the largest of the two operators, having already covered 850,000 premises and raising \u00a3795.5m of investment in the space of just three years (primarily via Advencap, DigitalBridge and Soho Square). The operator, which sells its packages to consumers via sibling ISP YouFibre<\/a> (they have 80,000 customers), also holds a tentative ambition to reach up to 2 million premises<\/a> by the end of 2025 (1.5m is already planned).<\/p>\n

NOTE:<\/strong> Both of the gigabit fibre operators share a connected investor in the shape of Advencap.<\/div>\n

By comparison, Brsk \u2013 fuelled by an investment of at least \u00a3259m<\/strong> (mostly via Advencap and the Ares Management Corp) \u2013 has so far covered 450,000 homes<\/a> (441,000 Ready for Service) in England and sells packages to consumers under the same brand (they have 28,000 customers). But they also aim to pass 1 million homes<\/strong> by 2026.<\/p>\n

According to industry sources, Brsk and Netomnia<\/a> are currently alleged to be engaged in discussions that could result in the pair agreeing to merge their networks “in the next 4-6 weeks<\/em>.” Such a deal would not be all that surprising, particularly given that both operators are partly being backed by the same investor, Advencap<\/strong>.<\/p>\n

In addition, both operators have managed to avoid overbuilding each other, and appear to share a similarly capital-efficient approach to infrastructure build, which harnesses as much of Openreach<\/a>’s existing cable ducts and poles (PIA) to run new fibre as possible (Netomnia spends an average of \u00a3250 per premises passed). This may be a key point, much as Netomnia recently told ISPreview in our interview (here<\/a>).<\/p>\n

Jeremy Chelot, CEO of Netomnia and YouFibre<\/a>, said:<\/strong><\/p>\n

“Where altnets differ significantly is the capital they spend to get premises RFS and to acquire customers. By the end of February 2024, Netomnia and YouFibre have only consumed \u00a3170m of debt. That works out to \u00a3200 of debt for each premises RFS \u2013 the larger altnets in the UK have consumed up to five times more debt than us for each premises they make RFS. And it\u2019s the same story with equity.<\/p>\n

Because of our key difference (capital efficiency), it makes consolidation in the UK very hard. We are so capital efficient that almost every deal will cost us more than organic growth and we have an addressable market in front of us of several millions. Therefore, while we would love to be a consolidator, it makes it difficult. We have not built the business to be consolidated. We focus on delivering for our customers and becoming the third network in the United Kingdom and that\u2019s what drives me!”<\/p><\/blockquote>\n

At this point, any agreement between the two would naturally create a much larger player in the AltNet space (c.1.5 million premises passed and plans for c.3 million) and one that could much more readily challenge the leading players in this space, such as CityFibre<\/a>, CommunityFibre<\/a> and Hyperoptic<\/a>. But equally, it could also turn them into a bigger target for CityFibre<\/a>\u2019s own M&A ambitions, further down the road.<\/p>\n

Finally, both operators adopt consumer pricing that is roughly within the same ballpark, although YouFibre’s packages do go a lot faster (up to 7-8Gbps). But suffice to say that this would make it easier to align their respective customer offerings, hopefully without upsetting the base too much.<\/p>\n

We queried all of this with Netomnia and Brsk today, although much as you’d expect, both returned a “no comment<\/em>” response (par for the course when asking about M&A or anything commercially sensitive). Time will tell.<\/p>\n","protected":false},"excerpt":{"rendered":"

Industry sources have indicated to ISPreview that two prominent alternative network operators, Netomnia (YouFibre) and Brsk, both of which have deployed a significant amount of Fibre-to-the-Premises (FTTP) broadband infrastructure to cover UK homes and businesses, could be set to merge their networks in the near future.<\/p>\n","protected":false},"author":1,"featured_media":32489,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[2660,472,56,2353],"class_list":["post-37788","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-brsk","tag-business","tag-fttp","tag-netomnia"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/112274486213135677","error":""},"yoast_head":"\nHints of Large UK Broadband Merger Between Netomnia and Brsk - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Industry sources have indicated to ISPreview that two prominent alternative network operators, Netomnia (YouFibre) and Brsk, both of which have deployed a\" \/>\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\/2024\/04\/hints-of-large-uk-broadband-merger-between-netomnia-and-brsk.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hints of Large UK Broadband Merger Between Netomnia and Brsk - 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