UK Enterprises Heading for a High-Fiber Diet

Summary Bullets: Rob Pritchard

  • CityFibre is reportedly in talks over a GBP 1 billion stake sale to fund further UK fiber rollout.
  • BT has also stated that it is looking for a joint venture partner to invest in Openreach’s extended fiber rollout.

You wait years for a full-fiber rollout; then three come along at the same time. UK infrastructure providers have been looking to accelerate their fiber network rollouts, increasingly with the backing of financial/institutional investors.

CityFibre has reportedly been talking to potential investors about a GBP 1 billion, 30% stake sale to accelerate its already ambitious GBP 4 billion fiber network rollout that will see full-fiber technology reach eight million UK premises (including 800,000 businesses and 400,000 public sector sites), representing nearly a third of the UK market. Existing strategic partnerships with Vodafone, TalkTalk, and Zen are testament to CityFibre’s ambitions, with a commercial model that seeks local partners to gather anchor tenants for infrastructure as it gets rolled out.

In the meantime, BT has stated that it is looking to extend Openreach’s investment in FTTP build plans from 20 million to 25 million premises by December 2026.  Moreover, it is exploring a potential joint venture for the additional 5 million-premises buildout.

In addition, Virgin Media and Telefonica-O2 have received the regulatory go-ahead for their 50:50 joint venture and have suggested that they will accelerate their fiber rollout plans in response. Other niche companies (e.g., Gigaclear, Netomnia) are also rolling out infrastructure on a regional basis, creating wider availability and choice.

So, partnerships rule in a time when customers, governments, and regulators demand fiber but infrastructure is expensive to roll out, meaning vendors need to focus on their core activity – be it infrastructure or service provision (but probably not content). And given a favorable regulatory environment and a government looking to invest for post-pandemic growth, it looks like UK enterprises are set to benefit from wider access to faster broadband speeds – if they are fortunate enough to be in the right locations.

The timing of this new wave of connectivity – complemented by 5G services – is good news for UK enterprises of all sizes with the shift to flexible working patterns. Many will be operating a hybrid employee office location model following the COVID-19 pandemic, and there is evidence of a ‘baby boom’ in new business creation.  Demand will continue for increased inter- and intra-company collaboration and communications, with cloud services continuing to balloon in use as UK plc increasingly becomes a nation of digital enterprises.

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