Now with added video!
Vodafone has broadened its fibre footprint to Birmingham, Bristol and Liverpool after signing a new wholesale agreement with Openreach.
The Vodafone business might be primarily known as a mobile business to most, though it has been making strides into the broadband world after signing an agreement with CityFibre last year. What this wholesale agreement with Openreach looks like is an effort by Vodafone to expand its fibre footprint in areas where its primary partner, CityFibre, does not have a presence.
With this wholesale agreement in place, Vodafone will soon be able to offer fibre broadband services in 15 locations throughout the UK.
“Vodafone is committed to a full fibre future and to creating the infrastructure Britain needs to compete and win in the digital era,” said Vodafone UK CEO Nick Jeffery.
“This initiative with Openreach builds on our existing commitments with CityFibre and underlines our belief in the power of digital technology to connect people for a better future and unlock economic growth for the UK.”
As part of the agreement, Vodafone’s Gigafast Broadband service will be available to customers in Birmingham, Bristol and Liverpool on the Fibre-to-the-Premises (FTTP) network from 2021. The first phase of the Openreach rollout is currently underway and the team plans to be able to reach as many as 500,000 customers on this network by mid-2021.
For Vodafone, this is a wholesale agreement which makes sense. The partnership with CityFibre looks to be one where the terms and conditions are very favourable to both parties, however Vodafone will want to be a service provider which can offer broadband to everyone. The CityFibre deployment strategy means secondary partners will have to be sought.
As part of the CityFibre agreement, Vodafone has made a minimum volume-based commitment for 10 years which increases over the period to 20% of the initial one million premises. In return, Vodafone has a period of exclusivity for consumer fibre-to-the-home services from CityFibre for 12 months, though the time-period is nuanced depending on location and the phase of network construction.
The CityFibre deployment strategy is also a point to consider here. CityFibre is targeting small and medium sized cities, as well as larger towns. These are areas which are generally not being targeted by the likes of Openreach or Virgin Media for fibre deployment. The idea is to create a scaled challenger, and targeting areas where rivals aren’t is a perfectly reasonable strategy.
In short, Vodafone will use CityFibre infrastructure as default, and Openreach in locations where it is not available.
For Vodafone, this partnership demonstrates something which many will see as a plus; ambition. The team is seemingly attempting to expand the fibre service offering to more regions across the country, which should add greater confidence in its pursuit of making a meaningful impact on the segment.
UK independent fibre provider Hyperoptic has had the majority of its ownership switched from lot of investment companies to another.
The new lot in control of the company is HKK, an investment company that seems to get involved in every industry in every part of the world. It acquired its stake in Hyperoptic from fellow investment companies Newlight and Mubadala. The terms of the deal weren’t revealed so we don’t know exactly how much of Hyperoptic owns or how much it cost, but this does seem to be the first time is has had a single majority owner for a while.
“We are incredibly grateful to Newlight and Mubadala for their unwavering support and significant contributions to the success of Hyperoptic,” said Hyperoptic CEO Dana Tobak, who will remain in place. “Currently, only 8% of the UK has access to full fibre and less than half of that to symmetrical gigabit services.
“We are confident that with the support of KKR and their significant expertise enabling high-growth businesses, our ambitious infrastructure plans to build our hyperfast network out to two million homes by 2021 and five million by 2024 will be realised.”
“Hyperoptic has a market-leading position and superior consumer product,” said two people from KKR in unison, apparently doing some kind of duet. “The business is strongly positioned to meet the growing demand for full-fibre services in the UK through further investment and national roll-out, supporting housing development and renovation. Our investment in Hyperoptic builds on KKR’s strong track record in telecommunications infrastructure in Europe, investing in and deploying next-generation digital connectivity.”
Meanwhile fellow UK fibre indie CityFibre has started an industry consultation on the role of such companies in the overall switch from copper to fibre. The move has apparently been prompted by the progress of CityFibre’s rollout in Stirling, which is set to switch to fibre-inly next year. There needs to be some kind of consensus about how best to support legacy services when the switch happens, the establishment of which seems to be the main point of this consultation.
“Only by collaborating as an industry, with the full support of government and Ofcom, will we be able to switch-over the UK from legacy copper networks to a future-proof full fibre platform,” said Greg Mesch, CityFibre CEO. “Our consultation will ensure that we play our part in this switch-over and that the eventual retirement of the copper networks is managed in a way that promotes sustained infrastructure investment from a range of organisations.
“With rollouts underway to reach over 20% of the UK market, our city-wide full fibre networks like that in Stirling will soon be of sufficient coverage to play their part, enabling a copper to fibre switch-over for the benefit of Communication Providers and their customers. Through our consultation, we look forward to engaging with the whole industry, including Openreach and BT Retail, to help develop a national plan to efficiently and smoothly upgrade Britain.”
With such a healthy independent infrastructure sector in the UK it seems clear some kind of best practice consensus is called for and it’s good to see someone try to get the ball rolling on that. Mesch will be speaking live at the Telecoms.com LIVE event in London on 7 November and this topic seems likely to come up. If you want to attend just click here to register.
With Boris Johnson (BoJo) settling into his new home in No.10 Downing Street, CityFibre is one of the first telcos to champion the office of the blonde bombshell.
“As the original champions of full fibre in the UK, we are delighted to see the new Government recognise the vital importance of rolling out this transformational infrastructure, and we stand ready to work with Government to help achieve this vision,” a CityFibre spokesperson stated.
The UK is now entering into the realms of the unknown, though there is one thing which we can be certain of over the next few months; politics is going to have a very different taste with BoJo at the helm. We couldn’t imagine a character more perfectly opposite to former-Prime Minister Theresa May, at least not in the Conservative party anyway.
“Full fibre connectivity is key to introduce a new generation of services, catalyse innovation, promote creativity and drive the economic and social development of the UK,” the statement continues.
What will be interesting to understand is whether the 100% penetration of full-fibre broadband services by 2025, a target hyped by BoJo over the last few weeks, is a genuine ambition or hot air. History has told us that BoJo has a tendency to get a bit over-excited when it comes to facts and figures, and this one might be a little ambitious.
The only certainty is change. BoJo will likely be more aggressive when it comes to Brexit and probably more pandering when it comes to the relationship with the US. BoJo is somewhat of a pet favourite of US President Donald Trump, fighting with former-UKIP leader Nigel Farage for most loving strokes from the Commander in Chief.
Some might say this is a good position for the UK, with Brexit forcing the Government to look further afield for lucrative trade deals, though the Huawei saga will continue. The Supply Chain Review announcement left no-one with clarity over the UKs position, though with BoJo’s White House relationship it might spell trouble. The can has been kicked down the street and it has landed firmly in BoJo’s office.
After a 24-hour period which some media sites have been describing as a ‘Cabinet Massacre’, the industry will also have to get to grips with a new Secretary of State for Digital, Culture, Media and Sport. MP for Loughborough Nicky Morgan has assumed control of the department, and her CV can tell you why…
After working as a corporate lawyer at Travers Smith specialising in mergers and acquisitions, Morgan moved in-house to corporate law and was then elected as an MP in 2010. Since that point, Morgan has as the Economic Secretary to the Treasury, Financial Secretary to the Treasury, Minister for Women and Equalities, Secretary of State for Education and Chair of the Treasury Select Committee.
Looking through the ‘They work for you’ website, Morgan has not contributed to any discussions which concern technology, media or telecommunications in recent months. An interesting choice for DCMS and an interesting couple of months in store as Morgan gets herself up-to-speed.
CityFibre has entered into the next phase of its challenge to the connectivity status quo with an additional 14 towns and cities to experience the full-fibre euphoria.
Although CityFibre has always presented itself as a challenger to the status quo, it was little more than an also ran until investment found its way across the Atlantic. With capital secured from Goldman Sachs’ Street Infrastructure Partners fund, CityFibre has been buoyed to build out its fibre spine into a genuine connectivity challenger. This latest expansion will take the number of full-fibre deployments across the UK to 26.
“CityFibre’s sole purpose is to deliver the future-proof digital infrastructure the UK deserves,” said CityFibre CEO Greg Mesch.
“With a new Prime Minister set to increase government’s ambitions for the pace of full fibre rollout, we are delighted to welcome another 14 towns and cities to our Gigabit City Club. These Gigabit Cities will not only gain new full fibre networks that will spark their digital transformation, but also unleash the benefits that only competitive infrastructure investment can bring.
“Our rollout to five million homes is gathering momentum. We have now confirmed 26 locations and over two million homes in our programme. We are investing, we are building, and we are connecting customers to networks of the future.”
The new towns and cities on the CityFibre expansion roadmap are; Batley, Bradford, Derby, Dewsbury, Doncaster, Inverness, Ipswich, Leicester, Lowestoft, Newcastle-upon-Tyne, Rotherham, Slough, Swindon and Worthing. These new projects will take the number of homes connected by CityFibre to two million, once completed of course, with CityFibre estimating the construction will create 3,5000 jobs.
For the UK, such ambitious moves will be nothing but good news. After ignoring the call for full-fibre connectivity for years, the Government is certainly taking an aggressive approach now. Not only are Openreach and Virgin Media aggressively expanding, numerous other challengers, nicknamed ‘alt-nets’ are providing additional momentum.
CityFibre might be the most recognisable name in the alt-net field, though others such as HyperOptic and Gigaclear are becoming more than a flash in the pan. There might be a need for consolidation in the future, but right now the additional competition is forcing aggressive geographical expansion of full-fibre networks.
Whenever CityFibre CEO Greg Mesch takes the stage at an industry conference you can expect a combative presentation and once again he delivered.
There was of course the customary pop at Openreach and the odd moan about the way fibre is advertised, but the crux of the talk at Connected Britain this morning focused on competition. No-one in the industry is brave enough to suggest competition is bad, but there are nuances to every argument. This nuance from Mesch effectively undermined the recurring argument that consolidation is good.
“Whoever takes over from Sharon White at Ofcom must not only encourage competition but protect it,” Mesch stated.
Competition is a buzzword which can be applied to almost every facet of the industry, and CityFibre has certainly benefitted from the hype. This is not to say the focus from government and regulators to promote competition is the only reason CityFibre is a success, it did after all spot a weakness in the fibre market and aggressively capitalised ahead of Openreach. But a nod to the desire to promote competition should be made.
Intensifying the focus on increasing competition will continue to benefit CityFibre, and arguably it will continue to benefit the UK, however it does present a problem for others in the telco industry. The more successful CityFibre is, the more the argument that CSP consolidation will be a good thing.
“The spark of competition has transformed into a small flame, but that small flame can be snuffed out if not protected,” Mesch stated.
It hasn’t been long since the UK was captured by the Openreach monopoly, and even after Virgin Media entered the fray, the country wasn’t exactly a competitive hotspot. CityFibre has added another dimension and the growth of ‘alt-nets’, such as HyperOptic, is further adding variety.
The UK telco landscape is certainly changing, and CityFibre has evolved as a business. To describe it as a plucky challenge would be a bit unfair nowadays, especially with the financial injection from Antin Infrastructure Partners and Goldman Sachs. Mesch said the board has approved expansion plans, and soon enough CityFibre will have deployed a fibre spine in more than 70 locations around the UK.
The success of CityFibre is arguably a factor which is pushing Openreach towards a fibre-first mentality, perhaps because Mesch and co. proved there was appetite in the market. And elsewhere, there are more competitors appearing on a more regional basis. HyperOptic is gaining scale in London, Toob has a presence in Southampton and Gigaclear is growing in the South-West.
Perhaps most importantly, the alt-nets are now being considered as realistic alternatives.
At the same conference, Sky UK CEO Stephen van Rooyen pointed out the company had unveiled an RFP in March with plans to announce the selected partners in the Summer. Sky is taking an interesting approach here, with plans to work on a regional basis with alt-nets instead of taking a nationwide procurement approach.
Arguably, because of the likes of CityFibre and the increasing popularity of the alt-nets, fibre is being pushed up the agenda and this isn’t even considering the ludicrous and idiotic statements made by Tory Leadership content Boris Johnson.
For the UK Government and regulator, the increasingly prominent role of fibre validates and justifies its pro-competition, anti-consolidation position. If the fibre landscape can benefit from increasing the number of players, the same arguments and theories can be applied elsewhere. This success effectively undermines any pro-consolidation voices which might still exist.
During yesteryear, CityFibre was known for moaning for the sake of moaning, but in securing a debt package of £1.12 billion, the firm’s ambitions are starting to look very real and very interesting.
Seven banks have financed the transaction, ABN AMRO, Deutsche Bank, Lloyds Bank plc, Natixis, NatWest, Santander and Société Générale, which will serve as the first installment of CityFibre’s £2.5 billion commitment for a nationwide fibre rollout. CityFibre has given itself a target of providing fibre to five million homes, a third of the Government’s target of 15 million, by 2025.
“The appetite from these institutions to support our financing is further evidence that CityFibre’s strategy is the right one for the UK,” said Terry Hart, CityFibre’s CFO.
“As our networks are rolled out, this will benefit everyone, driving innovation and increasing fibre penetration across the UK, providing the future-proof digital connectivity the UK needs. CityFibre’s target to reach five million homes by 2025, as well as thousands of businesses and public-sector sites, will catalyse huge economic growth in regional towns and cities across the country.”
CityFibre made it abundantly clear in its statement that this is an endorsement of the firm’s business model from heavy hitting financial institutions, and perhaps it does indicate a change in attitudes from investors.
Back in October, we attended an investor panel session at Broadband World Forum featuring the likes of the European Investment Bank and also Amber Infrastructure, a specialist venture capitalist firm. The message was clear from this panel session; investors are increasingly happy to fuel fibre rollouts as the business case has been justified and consumer demand has been validated.
This is where CityFibre sits. It doesn’t want to be a telco but become a serious infrastructure player. Owning the relationship with the consumer is of zero interest but creating a nationwide alternative to Openreach and becoming a connectivity wholesaler is the big picture. However, to be considered a viable alternative, there needs to be more of a presence than there is today.
Telcos don’t want to have a patchwork of relationships across a country to meet the connectivity demands. Multiple relationships create more overheads and more opportunity for something to go wrong. CityFibre has made good progress in rolling out fibre spines in numerous areas across the UK, but the gaps will have to be plugged if it wants to be a viable and realistic alternative to Openreach.
That said, CityFibre is looking like a business which has the right ingredients for a market which is primed for disruption. Aggressive ambitions, a head-strong CEO and the confidence of being owned by one of the world’s most powerful businesses. CityFibre is a very strong contender to make a genuine and permanent dent in the connectivity infrastructure game.
And a £1.1 billion investment from seven major financial institutions is a very good place to start.
CityFibre is stealing headlines once again, not trolling the industry this time, but investing £2.5 billion into it fibre network.
With various sized fibre footprints in 37 towns and cities throughout the UK, CityFibre has suggested the cash will be used to create a full-fibre environment. In some areas, such as Milton Keynes, the rollout is already underway, though in cities like Wakefield where the fibre spine is only 36km long, rollout will be accelerated.
“With a head-start in 37 towns and cities, this full fibre investment plan enables us to further accelerate our rollout, catalysing huge economic growth in regional towns and cities across the country and transforming the UK’s digital future,” said Greg Mesch, CEO of CityFibre.
“Our rollout will soon bring to scale an innovative wholesale network, providing internet service providers and mobile network operators with greater choice and unrivalled technical capabilities, benefitting all sectors of the market. We now need to work together across Government, Ofcom and industry to create a level-playing field that continues to encourage investment from multiple network operators, so that full fibre can be delivered as quickly and effectively as possible.”
With the new cash, and confidence from new owners Antin Infrastructure Partners and West Street Infrastructure Partners, CityFibre plans to deliver full fibre to five million homes, a fifth of the Government’s 2025 target of 15 million. The scale of its plan means it will be awarding city and town-wide construction contracts across the country for several years to come.
While CityFibre is certainly providing viable alternatives to the status quo through its partnership with Vodafone, this investment takes the challenge up a notch. Alt-nets are becoming increasingly popular throughout the world, and CityFibre is flying the flag in the UK.
“Significant investment from new network operators is critical to deliver our ambition for nationwide coverage,” said Jeremy Wright, Secretary of State for Digital, Culture, Media and Sport. “Through our Industrial Strategy we’re working with businesses and Ofcom to ensure effective network competition that supports investment on this scale.”
£2.5 billion is a nice big number, and it’s quite refreshing to be able to report about CityFibre on a story where it isn’t antagonising competitors or moaning about not being given an advantage by regulators.
CityFibre has announced a partnership with Calix to deliver, what it claims, would be the world’s only Software Defined Access (SDA) operating system across, delivering mouth-watering speeds across its fibre network.
With Calix’s AXOS platform, CityFibre is confident it will be able to claim to be the UK’s only advanced-intelligence, wholesale infrastructure company. With a Software Defined Networking (SDN) ecosystem, delivering new levels of programmability, network intelligence and automation, CityFibre claims it will be similar to owning the network, but without the upfront capital risk.
“In Calix we have found a like-minded ally, an innovator that is pushing the boundaries of what is possible when intelligent software meets fibre-only infrastructure,” said CityFibre CEO Greg Mesch.
“Our partnership enables us to unleash the full power and potential of our fibre networks, creating the nation’s fastest, smartest and most accessible, digital communications platform. The ability to scale services up to 100 gigabits per second, while driving customer experience to new levels, highlights the inadequacies of connections that are passed off as fibre today. It also shows that not all full fibre networks are equal and that, as an alternative network builder, CityFibre’s commitment to the UK’s digital future goes far beyond simply putting fibre in the ground.”
And while this might seem like a very sensible announcement for the often combative CityFibre, it has stoked the fire. Through the integration of the Calix platform, CityFibre believes it will be capable of delivering parallel 10 Gbps connections to every home and business, with further potential for speeds of up to 100 Gbps.
“The Calix and CityFibre visions of a software defined access future are perfectly aligned,” said Michael Weening, Calix EVP of field operations. “CityFibre built its network from the beginning to take advantage of all that a fibre infrastructure can enable, while we built AXOS with the intelligence to take that foundation to the next level.
“With AXOS, CityFibre can more rapidly deliver new products, services and features to the market, further distancing itself from legacy competitive offerings that fail to enable true market differentiation. As we continue to innovate on the AXOS platform, the continued speed, agility and efficiencies we enable will allow CityFibre and its partners to change the UK’s broadband market forever.”