TalkTalk Telecom Group has agreed to sell its FibreNation full-fibre network business, as well as its shareholding in Bolt Pro Tem, to UK wholesale infrastructure provider CityFibre for GBP 200 million.
The deal includes a wholesale agreement with TalkTalk for residential and business products in the areas where CityFibre builds. This deal is non-exclusive, allowing TalkTalk to partner with other network providers. TalkTalk will use the proceeds from the sale, which is subject to shareholder approval, to strengthen the group's balance sheet. The deal is expected to complete in March 2020.
TalkTalk established FibreNation with the aim of rolling out FTTP to more than 3 million homes and businesses across the UK. Over the last 18 months, FibreNation has targeted Harrogate, Ripon, Knaresborough and Dewsbury as the first towns to benefit from the roll-out, building upon a FTTP project in York. In the year to 31 March 2019, FibreNation reported pre-tax underlying losses of GBP 6 million. Its gross assets were GBP 47 million as of this date, representing 2.9 percent of TalkTalk Telecom Group's gross assets at the time.
From 5 mln to 8 mln homes passed by CityFibre
As a result of the acquisition, CityFibre is increasing its roll-out target from 5 million to up to 8 million premises. This combined roll-out creates an investment programme of up to GBP 4 billion on completion and will create up to 7,000 new network construction jobs outside of London, the company said. To support this, CityFibre will establish a Northern Centre of Excellence to help deliver the next-generation digital infrastructure across the North of England.
In parallel, CityFibre has signed a new agreement with network partner Vodafone UK to modify the terms of their existing partnership. This will allow CityFibre to open its networks to other consumer ISPs earlier than planned. Using CityFibre networks, Vodafone offers its Gigafast Broadband service in 11 towns and cities.
Vodafone said that that new agreement with CityFibre would allow it to accelerate the roll-out of full-fibre broadband across the UK. Under the terms of the modified partnership agreement, it will offer Vodafone Gigafast Broadband on a rolling, 12-month exclusive basis as homes become available for service in each of the 12 towns and cities covered in phase one of the deployment. This exclusivity was previously dependent on the time taken to deploy the CityFibre network in each city.
Vodafone expands on Openreach network
Furthermore, Vodafone confirmed that is was joining Openreach's fibre network trial in Salisbury. From spring 2020, Vodafone will migrate its customers in the area to Vodafone Gigafast Broadband without charging an upfront connection fee. This builds on an agreement announced at end-2019 between Vodafone and Openreach to bring fibre to 0.5 million homes in Birmingham, Bristol and Liverpool.
