CityFibre acquires FibreNation in £200m deal

Strategic acquisition sees growing UK fibre provider’s roll-out plans almost double in size, with TalkTalk joining network with long-term commitments for residential and business customers

In a move that the company says establishes itself as the as the UK’s third national digital infrastructure platform, leading UK fibre altnet CityFibre has acquired FibreNation from UK internet service provider (ISP) TalkTalk Group.

Founded in 2018 after a joint venture between TalkTalk, Sky and CityFibre, FibreNation was launched to deploy full-fibre infrastructure and services across York. It operates and continues to expand this network, where approximately 49,000 premises can currently access gigabit-speed broadband services from TalkTalk.

The company also has network construction projects underway in the Harrogate and Dewsbury regions, and is mobilising in both Knaresborough and Ripon, with plans to make full-fibre available to up to three million homes and businesses.

The takeover is valued at £200m and is part of an overall investment programme by CityFibre totalling up to £4bn, which will also secure TalkTalk as a major wholesale customer across consumer and business markets.

In addition to TalkTalk making long-term commitments across CityFibre’s existing and future network roll-out, the two companies will begin systems integration in preparation for the future launch of TalkTalk’s full-fibre services.

CityFibre spent the last months of 2019 accelerating its network, enabling the expansion of its Gigabit City Investment Programme across more than 100 towns and cities.

In October 2019, the company revealed that it was undertaking an industry-wide consultation process regarding the role of builders such as itself in developing the switchover from legacy copper networks, in an attempt to provide momentum in the development of a fibre infrastructure for the UK.

In November 2019, it appointed a chief delivery officer to help implement the plans to deliver full-fibre networks across the UK and accelerate its Gigabit City build programme, initiated in 2017 to enable its ISP partner Vodafone to launch residential fibre-to-the-premises (FTTP) services.

The acquisition of FibreNation, subject to TalkTalk shareholder approval, will increase CityFibre’s roll-out target from five million to up to eight million premises, and is projected to create up to 7,000 new construction jobs in the UK as CityFibre expands its reach across the UK.

To support the expansion, CityFibre is to establish a Northern Centre of Excellence, increasing its design and build capabilities to help deliver a new generation of digital infrastructure throughout the North of England.

“Digital connectivity has the power to transform our country into a nation of smart, connected towns and cities, boosting and levelling up our economy,” said CityFibre chief executive Greg Mesch.

“Today’s announcement… [allows] millions more consumers and businesses to benefit from access to faster, more reliable services. 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.”

TalkTalk chief executive Tristia Harrison added: “This agreement is good news for TalkTalk and good news for Britain’s fibre roll-out. Our investment over the last five years and the excellent work delivered by the FibreNation team, combined with CityFibre’s well-established platform, will support wide geographical reach of full-fibre and further drive competition and customer take-up in the market.”

As it was announcing the acquisition, CityFibre also revealed it had modified the terms of its partnership with Vodafone so that it can open up its networks to other consumer ISPs sooner than planned. Since the Gigabit City investment programme started, the Vodafone Gigafast Broadband service has become available in 11 towns and cities.

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