CityFibre ready to challenge BT after buying £90m national fibre network
CityFibre has today announced the £90m acquisition of a national fibre and duct network, making it the UK’s largest wholesale infrastructure provider after BT Openreach.
The acquisition of national communications infrastructure owned by KCOM – excluding its network in Hull and East Yorkshire – will extend CityFibre’s national footprint by more than 300%.
The deal makes CityFibre a "secure independent infrastructure alternative", the company said as it announced the acquisition.
It includes 1,100km of duct and fibre cabling in 24 UK cities, and a 1,100km national network connecting these cities to major data centres and internet exchanges in London.
CityFibre has secured £180m of financing – £80m of new equity and £100m in debt facilities – both to fund the acquisition and to continue the commercialisation of its national network.
The company has been building gigabit fibre networks in York, Peterborough, Coventry, Aberdeen, Edinburgh and Glasgow, and owns local access networks in a number of other UK towns and cities.
Its expanded footprint will span 36 cities, serving more than 7,000 mobile cell sites, 24,500 public sector sites and 245,000 businesses.
CityFibre said the deal will also support the rollout of fibre to the home broadband to 3.5m homes.
The firm’s CEO, Greg Mesch, said: “This is the most significant event to take place in the UK’s digital infrastructure market in a decade.
“The UK now has a secure independent infrastructure alternative.
“Cities, service providers, mobile operators and investors have boldly embraced a new model of future-proof infrastructure provision and paved the way for its acceleration across the country.
“With our enlarged footprint and strong pipeline of cities demanding better infrastructure, we will continue to grow, offering existing and new partners an ever increasing opportunity to capitalise on a pure fibre future.”
CityFibre said it will continue to make its infrastructure available to other providers, including KCOM, on a wholesale basis.
In a statement, KCOM said proceeds from the deal will be used to reduce the company’s net debt.
CEO Bill Halbert said: “Today’s announcement unlocks considerable value in relation to an under-utilised asset, built more than 10 years ago and which is no longer core to our strategy.
“Over the first half of the financial year, there were encouraging signs that our business transformation is starting to deliver results and the proceeds from this transaction offer us the opportunity to accelerate investment in those plans, without the need for any material increase in our indebtedness.”
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