Cityfibre have confirmed that they’ve completed their £200m purchase of FibreNation from UK ISP TalkTalk, which increases the operator’s roll-out ambition for 1Gbps Fibre-to-the-Home (FTTH) broadband technology from 5 million to nearly 8 million premises, supported by an investment project of up to £4bn.
The full fibre builder originally started their national FTTH deployment in late 2018 (here) – supported by UK ISP partner Vodafone and substantial investment from Goldman Sachs – with a plan to spend £2.5bn on extending their “gigabit-capable” network to reach at least 1 million premises across 12 cities and towns by the end of 2021 (c.£500m Phase One), then 5 million premises in 37 cities and towns by the end of 2025 (c.20% of the current UK broadband market).
Separately TalkTalk’s FibreNation (FN) project had long aspired to cover 3 million UK premises, but they struggled to secure enough investment (c.£1.5bn) and had thus begun with a much more limited deployment. So far FN has covered c.54,000 premises in York and they were working to reach 61,000 in Dewsbury (here), 50,000 in Harrogate (here), 6,000 in Batley (here), 100,000 in Bolton and various other locations.
The now combined project means that Cityfibre could potentially build out full fibre to reach 100+ cities and towns (i.e. covering 30% of the United Kingdom’s broadband market). As we understand it the initial roll-out plan still expects to reach 1 million premises by the end of 2021, while the next target of 8 million would then be substantially completed by the end of 2025 (i.e. full completion to hit 8 million may take a bit longer).
Greg Mesch, CEO of CityFibre, said:
“In the face of the rapid spread of the Coronavirus and its unprecedented impact on the UK’s society and economy, we believe that the need for world-class digital infrastructure has never been greater.
Completing our acquisition of FibreNation marks an acceleration in our ability to deploy the critical future-proof digital infrastructure our country needs. By significantly expanding our rollout ambition to up to 8 million premises, CityFibre is helping to answer the call for a full fibre Britain.
With TalkTalk now joining our networks to offer full fibre services to their residential and business customers, we look forward to working with our new FibreNation colleagues to maximise the benefit of our rollouts.”
Tristia Harrison, CEO of TalkTalk, said:
“Now more than ever, reliable and affordable connectivity should be available to every single home in Britain, and this agreement shows that a full fibre future can be delivered through competition and investment by many players. CityFibre’s ambitions to take forward our hard work with FibreNation over the last five years, should take us a step closer to that fully connected Britain.
The sale of FibreNation to CityFibre, in combination with a competitive wholesale agreement, enables us to continue our strategy to accelerate TalkTalk’s fibre growth for our residential and business customers, thereby delivering a superior customer experience at an affordable price.”
The TalkTalk Group will now begin a process of systems integration as part of its “long-term commitments” across Cityfibre’s existing and future network roll-out (i.e. they are now a wholesale customer of Cityfibre), ensuring its customers can still benefit from the faster network as it grows. New FTTH packages are also expected to follow in the near future (at present there is no change to those already taking TT’s service in York). In theory the combined plans could help to create up to 7,000 construction jobs outside London.
Technically speaking Sky Broadband still appears to be a wholesale partner under the FibreNation part of this network, although they don’t seem to have been actively selling related products to new customers in York for awhile (feedback suggests their sales teams are largely oblivious to it now). Nevertheless we anticipate that Cityfibre will seek to open negotiations with a view to extending Sky’s involvement to their wider network.