CityFibre could expand fibre rollout to 10m UK premises

Optical fiber
(Image credit: Pixabay)

CityFibre could expand its full fibre rollout to 10 million homes and businesses across the UK if it completes the sale of a 30% stake in the company to a private equity firm.

The company’s two major shareholders – Wall Street Infrastructure Partners and Antin Infrastructure Partners – control 70% of the company but according to The Mail on Sunday¸ CityFibre is nearing a sale of the remaining 20% for £1 billion.

CityFibre doesn’t offer any direct-to-consumer products but instead delivers wholesale services to broadband providers, such as TalkTalk and Vodafone, and to mobile operators who require fibre backhaul for their mobile sites.

CityFibre rollout

It is the UK’s third largest network infrastructure operator, after Openreach and Virgin Media, and is currently in the middle of a £4 billion programme that will see 8 million properties connected by 2025. This represents a third of the country and includes 800,000 businesses, 400,000 public sector sites and 250,000 5G access points.

The wider availability of fibre and greater competition between infrastructure providers should mean better home broadband services and superior 5G networks.

CityFibre CEO Greg Mesch told the newspaper that it could increase its target to the aforementioned 10 million if it received the additional investment and was successful in its bid for public funding.

The UK government has made £5 billion available to help connect the most rural parts of the UK to ultrafast broadband, although only a fraction of this will be made available during the current parliament.

Ontario Municipal Employees Retirement System is named as one of the interested bidders but Mesch is quoted as saying that as many as 20 different private equity firms wanted to get involved in the UK’s rollout of fibre infrastructure.

There has been a flood of investments in the sector by private equity firms in recent years because of the predictable, stable revenues promised by assets such as fibre networks and mobile masts. Meanwhile demand for ultrafast broadband and 5G means there is scope for growth.

This long-term view contrasts with the short-term pressures that network investment imposes on mobile operators who are in the middle of expensive network builds.

Via Mail on Sunday

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.