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Vodafone and CityFibre said to be close to new fibre deal

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Telcos return to Plan A after Labour Party‘s pledge to renationalise telecoms disappears with election defeat.



Vodafone and CityFibre's expected deal would bring a new era of investment in full-fibre lines to the UK, which involves a number of steps. According to a report in the Financial Times [subscription needed], the deal could be finalised by the end of this week.

Telecoms put on hold

Prior to the UK General Election, CityFibre was in take-over discussions with TalkTalk to acquire its FibreNation unit, which has fibre network around the northern English city of York  and planned to pass 3 million homes across the UK to compete with BT’s Openreach.

Under that deal CityFibre’s owners, Goldman Sachs and Antin Infrastructure Fund, intended to spend another £1.5 billion to extends its network to pass 8 million homes.

TalkTalk and possibly Sky, one of the original investors in the York network, would have become anchor tenants for Cityfibre’s new network.

However, that was complicated by a 2017 exclusivity deal between Vodafone and CityFibre covering 1 million homes, with an option to increase the number to 5 million.

Renegotiating terms

It is the renegotiation of that contract, possibly by the end of this week, that would allow CityFibre to complete the FibreNation takeover and sign new deals early next year with TalkTalk, Sky and smaller internet providers to use new full-fibre lines in more than 50 cities where it owns infrastructure.