Urban focused fibre optic (FTTP/H) network builder Cityfibre has officially removed itself from the London Stock Exchange’s international AIM market for smaller companies, which occurs at the same time as Connect Infrastructure Bidco conclude their £537.8m acquisition of the company. Bidco is a newly-incorporated company that is jointly-owned by a consortium of two key infrastructure investors (Antin Infrastructure Partners and West Street Infrastructure Partners), which hope to provide Cityfibre with the appropriate funding and support to accelerate the operator’s national deployment of Fibre-to-the-Premises (FTTP) broadband technology to reach no less than 20% of the UK. At present Cityfibre’s “full fibre” network already has a presence in over 50 UK cities and large towns, although most of those are currently focused on catering for public sector and business sites. On top of that they also have several 1Gbps capable residential FTTH deployments, such as via their legacy network in Bournemouth and a joint project with TalkTalk and Sky Broadband to cover the city of York. At the end of last year this was joined by a major £500m agreement with Vodafone UK that will initially aim to roll-out their ultrafast network to a “minimum” of 1 million homes in up to 12 of Cityfibre’s existing cities and towns by the end of 2021 (here). The build phase for this has already begun and if successful then the rollout could be extended up to 5 million homes by 2025. Perhaps unsurprisingly it didn’t take long before Bidco surfaced to announce their acquisition in April 2018 (here), which valued the entire issued and to be issued ordinary share capital of Cityfibre at approximately £537.8 million and essentially returned the operator to being a private company. Greg Mesch, CEO of Cityfibre, said: “Having shaken up the UK telecoms market over the last five years and sparked the race to deliver a full fibre future for Britain, this transaction will enable CityFibre to accelerate our deployment of transformational digital infrastructure still further. These are exciting times, and as the only builder of scale, CityFibre is ideally positioned to make the most of this opportunity to modernise the UK’s digital infrastructure. I would like to take this opportunity to thank the shareholders who have supported us since our initial listing on AIM. We have raised over £320m on AIM and believe that without the support of the capital markets, our progress both operationally and strategically would not have been so rapid.” Philippe Camu and Mark Crosbie (Bidco Investors) said: “We are delighted to be supporting CityFibre through its next cycle of growth and believe the business is ideally placed to continue to transform the UK telecommunications market. With the need for next generation infrastructure growing at pace, the provision of high quality fibre networks is vital to the ongoing economic development of the UK, and CityFibre sits firmly at the centre of that structural shift.” At this stage Cityfibre’s FTTH rollout is only just getting started and despite plenty of talk about being “the only builder of scale,” they’re currently still well behind Hyperoptic and Openreach in the race to physically cover homes with pure fibre optic lines. Even Gigaclear with 65,000+ rural premises passed may be ahead of them in the residential market. So far Openreach claims to have made FTTP available to 560,000 premises passed (target to reach 3 million premises by 2020 and aspiration for 10 million by c.2025), while Hyperoptic have completed more than 400,000 (target to reach 2 million in 2022 and an aspiration for 5 million by 2025). Virgin Media have also said they aim to reach 2 million premises with FTTP by the end of 2020 but we aren’t counting them as they’ve refused to release any data on actual premises passed (instead they lump it in with their hybrid fibre coax stats). Likewise TalkTalk hopes to cover 3 million premises but so far we’ve only seen a soft launch of their plan. Nevertheless Cityfibre are extremely well positioned and we’re expecting Vodafone to unveil their first package details, as well as some additional city deployments, during the summer. At least the money is now there to fulfil the first rollout to 2021, which is vitally important.
Fibre-optic network builder Cityfibre has de-listed from AIM, the LSE market for smaller companies, as Bidco completes acquisition of it. The company said it had been unable to find a buyer and was now looking at other options including selling its stake in the company. Cityfibre’s network already has a presence in more than 50 UK cities and large towns, plus several deployments, including a project with TalkTalk and Sky Broadband covering York.