Ultimate magazine theme for WordPress.

Vodafone widens UK broadband footprint with capacity deals

0 7

Vodafone has stepped up its push into the UK broadband market after striking new deals with BT’s Openreach and challenger network CityFibre that hand the group the largest ultrafast broadband footprint in the country.

The deals means Vodafone will be able to offer the high-speed broadband product to 8m homes by next spring at steep discounts as it looks to grow its share of the market.

The UK company is Europe’s largest broadband provider, with more than 25m customers after acquiring cable networks in markets including Germany and Spain. Yet it does not own a residential fixed-line network in its home market and instead leases capacity from its rivals.

In recent days it has signed new deals with BT and has deepened its partnership with CityFibre having initially signed a deal with the ‘alt-net’ provider in 2017.

“A couple of years back we were new to broadband but by spring we will have the widest fibre-to-the-premises footprint in the UK,” Ahmed Essam, chief executive of Vodafone UK, told the Financial Times.

Essam said that not owning a broadband network in the UK has meant Vodafone could play the field and expand its reach. “BT will always sell on BT. Virgin Media will always sell on Virgin Media,” he said of his main rivals.

He said he remained open to a deal with Virgin Media O2, or other network builders, to expand its capacity further.

CityFibre’s original deal with Vodafone, worth up to £500m at the time, helped establish the company’s initial network expansion into cities and towns such as Milton Keynes, Cambridge, Coventry and Edinburgh as the alt-net looked to lay fibre in places BT had yet to upgrade.

The new agreement, which has not been previously reported, will support CityFibre’s national build to 285 cities and towns alongside TalkTalk, which also uses its fibre.

Greg Mesch, founder and chief executive of Goldman Sachs-backed CityFibre, said Vodafone was now an “anchor tenant” that would underpin its expansion to 8m homes across the country from 1m today.

CityFibre raised £1.1bn in equity and debt in September backed by Abu Dhabi fund Mubadala and Interogo Holding, the investment arm of Ikea’s owner, to accelerate its expansion.

“There’s not only room for a third network but there’s room for a third network to thrive,” said Mesch.

It is the most established of dozens of ‘alt-nets’ that have emerged in recent years to lay fibre in the UK and is looking to use its financial muscle to acquire some of smaller rivals.

The group has opened talks with Toob, a rival that has built fibre in Southampton and expanded into nearby areas on the south coast of England, in recent weeks, according to two people with direct knowledge of the situation. CityFibre and Toob declined to comment on the talks.

Leave A Reply

Your email address will not be published.