Antin Infrastructure Partners and Goldman Sachs, the new owners of UK-based full fibre provider CityFibre, have agreed to invest £2.5 billion ($3.2 billion; €2.8 billion) in the rollout of full fibre infrastructure in the UK, which could see the company gain a third of the market share.
The company, which Antin and Goldman Sachs took private in a £537.8 million deal earlier this year, said the investment programme will see five million homes in an initial 37 cities in the UK benefitting from full fibre broadband by 2025, a third of the 15 million targeted by the government. The city count is eventually expected to reach 50.
Some £465 million of the pledged funds will be rolled out alongside telecoms group Vodafone in 10 of the 37 cities and the process is targeted to be completed by 2021.
CityFibre declined to state the split of the £2.5 billion investment between the two firms and did not disclose how much of the investment programme will be funded by debt. It is unclear whether the two firms will finance the new investment through their respective vehicles – Antin Infrastructure Partners III and the West Street Infrastructure Partners III – through which they funded the acquisition.
Earlier this year, Infracapital’s greenfield fund announced a tie-up with TalkTalk to provide full fibre to three million UK homes. The pair plan to invest a total of £500 million in equity as part of a £1.5 billion investment.
Following Antin and Goldman Sachs’ acquisition of CityFibre, the group said that private ownership will enable the company “to gain alternative and potentially easier access to the financing required” for its rollout ambitions.
Greg Mesch, chief executive of CityFibre, earlier this year said the sector “has been held back by a deliberate lack of investment by BT Openreach” and today called for wider investment from the industry.
“We now need to work together across government, [regulator] 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,” Mesch stated.
Ofcom welcomed CityFibre’s plans as “proof of the powerful business case for full-fibre broadband” in the UK and said it has made things easier for companies to build new networks. The UK has one of the worst fibre-to-premises rates in Europe, according to a report from FTTH Council Europe published in February, with a penetration rate of below 1 percent.