CityFibre soars as it teams up with Vodafone to build gigabit network
CityFibre Infrastructure Holdings
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16:55 20/06/18
Vodafone and CityFibre, the UK's largest alternative provider of wholesale fibre network infrastructure, announced a long-term strategic partnership on Thursday that would bring gigabit-capable full fibre broadband to up to five million UK homes and businesses by 2025.
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The two companies, listed on the FTSE 100 and AIM respectively, said that under the wholesale agreement, Vodafone will have a period of exclusive rights - predominantly during the build phase of each city network - to market ultrafast consumer broadband services on the FTTP network to be built, operated and owned by CityFibre.
Construction of the first phase of deployment to one million premises was due to start in the first half of 2018, and would be largely complete in 2021.
Both parties have the right to extend the commercial terms of the agreement to expand coverage to a further four million homes and businesses by 2025.
FTTP networks use fibre-optic cables for every stage of the connection from the customer's home or workplace to the wider internet, providing “extremely fast” and reliable broadband services capable of gigabit speeds, which are more than 10 times faster than top speeds currently available on most Openreach-serviced ‘fibre’ connections.
The two firms said FTTP broadband connections were “vastly superior” to outdated networks that rely on old copper telephone lines to connect to the customer's premises.
Currently, both predominant broadband networks - BT’s Openreach and Liberty Global’s Virgin Media - use copper cabling to connect the customer’s home to the rest of the network.
Vodafone and CityFibre said the partnership represented “one of the most significant developments” in UK telecommunications since the launch of ADSL broadband around 17 years ago.
It would reportedly help to bridge Britain's fibre gap, bringing gigabit-capable FTTP connections to households, businesses and public sector sites such as schools, hospitals and GP surgeries, and delivering 50% of the UK Government's target of 'full fibre' to 10 million homes and businesses.
Advanced fibre networks were also critical for mobile networks, providing the very high-capacity backhaul connections required for 5G mobile services from the early 2020s onwards.
The agreement provided Vodafone UK with access to a superior product at a lower cost and with better service conditions than the regulated wholesale terms offered by the incumbent operator - i.e. Openreach - for access to its legacy copper telephone line broadband network, its board claimed.
It said it was consistent with Vodafone Group's capital-smart fixed infrastructure strategy that aimed for an optimal mix of build/strategic partnership/wholesale/buy approaches in fixed broadband.
The strategy had positioned Vodafone as the fastest growing broadband provider in Europe, the board claimed, marketing high-speed broadband services to 99 million European homes - a footprint that will be expanded further under this agreement.
“This agreement will unlock the UK's full fibre future and is a major step forward in delivering our vision for a gigabit Britain,” said CityFibre chief executive Greg Mesch.
“With this commitment from Vodafone, we have a partner with whom we can transform the digital capabilities of millions of homes and businesses and establish an unassailable wholesale infrastructure position across 20% of the UK broadband market.”
Vodafone UK chief executive Nick Jeffery added that Vodafone was already playing the leading role in building the ‘Gigabit Society’ across Europe, by providing customers with high-speed, high-quality broadband.
“The UK has fallen far behind the rest of the world, trapped by the limited choice available on legacy networks,” Jeffery added.
“We look forward to working with CityFibre to build the gigabit fibre network that the UK needs and deserves.”