Altnets Netomnia, brsk announce merger

Merger of broadband indies described as transformative step for UK telecoms industry, establishing what companies say will be only scaled and capital-efficient retail, wholesale and consolidation platform

Consolidation between the many independent broadband internet players (altnets) in the UK has been regarded as only a matter of time in the face of stiff economic headwinds, and in a move that will create the UK’s second largest altnet, Netomnia and brsk are set to combine forces.

Founded by Giorgio Iovino and Ian Kock in 2020, both founding members of Vumatel – now the largest fibre network in South Africa, brsk has expanded its network from its humble beginnings in West Yorkshire in 2021, with the network reaching into three more key urban regions – namely Manchester, the West Midlands and Lancashire – with approximately 250,000 ready for service (RFS) homes and 14,000 customer connections.

In a huge boost to its prospects in completing its stated mission to bring better broadband to underserved areas of the UK, the company secured an additional £156m debt investment in August 2023.

The funding – managed by Ares Management Corporation’s Infrastructure Debt strategy – sees its total investment upsized from an initial £103m commitment to now total £259m. The financing has been used to support brsk’s growth and enable its fibre-to-the-premises (FTTP) broadband network to reach a million homes by 2026. The company said it was able to muster a team with a proven track record in the deployment of fibre optic infrastructure, and in supporting the UK’s “urgent need to progress from outdated copper-based broadband”.

For its part, Netomnia has claimed for some time to be one of the UK’s fastest-growing wholesale fibre broadband operators, supporting symmetrical multi-gigabit services up to 10Gbps using XGS-PON technology, and is undertaking network deployments in Purfleet, Essex; Coatbridge, Scotland; Mansfield, Nottinghamshire; and Bedfordshire.

Recently, Netomnia secured an additional £147m in debt from two new lenders, JP Morgan (JPM) and Rand Merchant Bank (RMB), joining existing lenders Alpha Bank, Ares, Barclays, HSBC UK, ING, NIBC, Nord/LB, Standard Chartered, RBC and UKIB.

The two companies regard their merger, which they say marks a transformative step for the UK telecoms industry, as establishing what they say will be the only scaled and capital-efficient retail, wholesale and consolidation platform in the market. The new group will have a combined network footprint of 1.5 million premises immediately post-merger, with a target of reaching three million premises by the end of 2025.

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Netomnia and brsk have built 1.5 million RFS premises and connected 140,000 customers so far, using £300m of debt. They plan to use up to £900m of debt to grow the footprint to three million premises, demonstrating the companies’ prudent approach to capital management.

The merger is set to be finalised in the coming weeks, pending regulatory approval, enabling customers to benefit from the two firms’ alternative FTTP platform, offering a “seamless network experience”, unified pricing and enhanced service quality across the shared footprint.

It will be led by Netomnia’s Jeremy Chelot as CEO and Wil Wadsworth as chief financial officer, while Iovino and Kock will remain as brsk chief executive officer and chief operating officer, respectively.

“By merging our network expertise and resources, we are creating a powerhouse to deliver an unparalleled internet experience for our customers, driving innovation and further consolidation among altnets,” said Chelot. “The additional capital from our investors and support from our lenders is a powerful endorsement of our vision and ability to execute at the highest level.”

Iovino added: “The merger is a testament to our shared entrepreneurial spirit and experienced teams that can deliver even more. Together, we are set to deliver a fibre network that is not only fast and reliable, but also future-proof, ensuring our customers benefit today and tomorrow. Our joint platform will be where the most powerful internet lives.”

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