Financial investors back Gigaclear’s founder in new venture to serve UK’s 28 million homes without fibre.
Matthew Hare, who set up and sold the rural broadband firm Gigaclear to Prudential’s Infracapital fund for £270 million in cash, has established a new venture to bring full-fibre connections to smaller cities and suburbs.
Gigaclear was launched in 2010 and had 65,000 customers when it was sold last year. The new company, Zzoomm, is based in Oxfordshire. According to a report in the Financial Times, he has invested £1 million of his own and is talking to possible investment sources.
Hare said he hopes to install the first full-fibre lines by summer and 1 million homes within five years.
A number of so-called altnets providers have entered the British market in recent years as the incumbent BT preferred to invest in broadcast rights for football than access infrastructure.
This lack of investment resulted in regulatory pressure from Ofcom, which obliged BT to make its access network company, Openreach, into a separate legal entity, stopping short of making it spin it off altogether.
In the meantime, others have stepped into the market: Infracapital also runs a fibre company in the Isle of Wight; CityFibre was sold to Goldman Sachs’s West Street Infrastructure Fund and Antin Infrastructure Fund for £538 million; and an Abu Dhabi-based sovereign wealth fund acquired a stake in Hyperoptic.
Hare is not fazed by the level of competition, according to the FT report, even though TalkTalk and CityFibre have said they too are looking to move into tier 2 cities. He told the newspaper, “There are 30 million properties in the UK but only 2m have full-fibre.”
As well as towns like Hastings, Amersham, Weymouth and Huntingdon, suburbs of big cities like London and Birmingham have also been neglected, with BT often upgrading copper links instead of providing full-fibre connectivity.
Hare said homes needed 1Gbps speeds and that upgraded copper infrastructure “was a sticking plaster…We need to peel that off”.