BT’s biggest wholesale access rival teams up with regional fibre altnet
CityFibre, the UK’s largest independent full-fibre rival to BT’s semi-detached wholesale access arm Openreach, has signed an agreement with toob. The latter is also a fibre-network builder and broadband provider, based in the south of England. Through the agreement, toob can expand its footprint across CityFibre’s national network and CityFibre can wholesale toob’s infrastructure.
CityFibre has network projects in more than 60 towns and cities, and has said it expects to have “substantially completed” its build-out by 2025 which is expected to pass up to 8 million homes, 800,000 businesses, 400,000 public sector sites and 250,000 5G access points.
CityFibre was acquired by Goldman Sachs for £750 million in 2018 and after its latest round of fund raising – in June it secured £4.9 billion debt package comprising committed facilities of £3.9 billon and an accordion facility of £1 billion – says it now has enough to complete its planned network construction.
toob was launched in 2019, by Nick Parbutt (CEO) and Mike Banwell (CFO), former directors at Vodafone UK, and raised £75 million to fund its initial build. toob offers a symmetrical 900Mbps product for the highly competitive price of £25 a month within its footprint, and from today will increasingly use CityFibre’s infrastructure to extend its offer, first going live in Portsmouth before launching in areas adjacent to its own roll-out.
The companies have also agreed Heads of Terms for a wholesale aggregation partnership: toob’s current and future network builds will be incorporated into CityFibre’s ready for service footprint, expanding the addressable market for all CityFibre’s internet service provider (ISP) partners.
Technical matters
The technical integration of toob’s footprint is expected to be completed by summer 2023 and will provide CityFibre’s ISP partners access to over 100,000 homes across Southampton and Camberley. toob plans to build a network to more than 1 million premises across the south of England over the next five years, all of which will be made available to CityFibre’s ISP partners at the same service levels as CityFibre’s own network.
Greg Mesch, CEO at CityFibre said, “We are delighted to welcome toob on board as a service provider partner on our networks. They’ve had great success driving take-up of their services and we look forward to helping them extend their exciting service proposition to millions of new homes over our network.
“This deal also represents the UK’s first major partnership between infrastructure builders, establishing a new model of wholesale aggregation that significantly accelerates and expands the addressable footprint available to our wholesale ISP partners.
“For smaller fibre network builders which currently only offer their own retail broadband services across their footprint, it also establishes an opportunity to expand their retail offering, opening a lucrative wholesale revenue stream and maximising take-up over their network.”
Nick Parbutt, CEO & Founder at toob said: “toob is delighted to be partnering with CityFibre. Opening our own network to other ISPs has been part of our strategy from the outset, and partnering with CityFibre allows ISPs to access the toob full fibre network.
“Likewise expanding our very successful brand and proposition in the region by using CityFibre’s Network provides a great opportunity to capitalise on our investment in the region, offer our proposition to more customers and ultimately grow the company.”