CityFibre coughs £90m for nearly all of KCOM's UK comms network
You listening BT, we're heeeere, says CEO of expanding biz
Broadband player CityFibre claimed it is shaping up to be a viable “challenger” to BT after coughing £90m for KCOM’s national comms infrastructure – excluding Hull and East Yorkshire.
The deal, which includes 1,100 km of duct and fibre network in 24 cities – 21 of which are new to CityFibre – and a long distance network, was funded by £80m of new financing and £100m in debt facilities. It originally cost KCOM circa £200m to build.
“This is the most significant event to take place in the UK’s digital infrastructure market in a decade,” said CityFibre CEO Greg Mesch, who claimed, “the UK now has a secure independent infrastructure alternative”.
The acquisition advances CityFibre’s forecasted plan by five to seven years, the company said.
The financing and acquisitions are expected to complete mid-January, expanding CityFibre’s footprint to 36 cities, addressing more than 7k mobile cell sites, 24,500 public sector sites and 245k businesses.
The buy positions the buyer as the “first challenger to the national incumbent, nearly ten years to the day since the formation of BT Openreach”, CityFibre said.
A troubled division of the Brit telco monopoly, Openreach could well be spun out of the BT mothership once Ofcom ends its review of the UK digital landscape. The noise from rivals and industry folk calling for such an outcome has become deafening.
As part of the buy, KCOM has signed up as a service provider partner to use the wholesale fibre network and is expected to spend £25m over the next half a decade, with use rights for 15 years.
CityFibre has also been wooing BT punters included Vodafone, which has signed a master services agreement.
The infrastructure will also be leased to other providers of service, server farms and mobile operators.
KCOM publicly erected a for sale sign outside of the network infrastructure unit last month, and only ever planned to keep hold of the plumbing in Hull and East Yorkshire, the area where the organisation was conceived. The sale will help to cut its debts to a mere £13m. ®