Vodafone, CityFibre ink major UK fibre deal

Phase one of project will reach 1 million properties in the U.K. at a cost of £500m, with construction set to commence in 2018

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Vodafone UK and CityFibre have struck a deal to roll out fibre-to-the-premises (FTTP) services to up to 5 million homes and businesses in the U.K. by 2025.

The pair will jointly invest £500 million (€564 million) in the initial phase of the project, which will take 1 GB broadband to 1 million premises by 2021. CityFibre will supply the wholesale network while Vodafone supplies retail FTTP services, initially exclusively, although the network will ultimately open up to other providers.

Phase one will build on and expand CityFibre's existing footprint in 12 U.K. towns and cities, the telcos said, without specifying how much new infrastructure CityFibre would roll out.

"Construction for the initial phase will commence in 2018, peak in 2020 and is scheduled to be complete within four years," said Greg Mesch, CEO of CityFibre, speaking on a call with journalists on Thursday.

"We have a framework in place to extend this to 5 million homes, which would deliver 50% of the U.K. government's target to deliver full fibre broadband to 10 million premises," he added.

Vodafone took the opportunity for a sideways swipe at U.K. incumbent BT and its networks arm Openreach, which has for the most part dragged its feet on full fibre rollout.

"The agreement with CityFibre provides us 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 for access to its legacy copper telephone broadband network," said Vodafone UK chief executive Nick Jeffrey.

Unsurprisingly, CityFibre's Mesch agreed.

"FTTP networks are vastly superior to outdated networks which rely on old copper telephone lines to connect to a customer's premises," he said.

Both companies issued a warning to the government that the U.K. risks being left behind if it does not move quickly to upgrade its aging telecoms infrastructure.

"If the U.K. is to thrive in the future, then FTTP needs to happen now, not later," said Jeffrey. "Only with Gigabit fibre provided directly to the doors of homes and businesses will the U.K. be able to compete with other advanced economies that have already invested in modern, digital infrastructure."
 
This sentiment was echoed by Mesch, as he challenged the U.K. telecoms sector to step up to the plate.

"The time has finally come for the U.K. to join the more advanced markets of Europe in the full fibre league tables," he said.

"The market has been held back for too long, with everybody being forced to consume from one major incumbent operator," he added.

"If you look around the world, in every country where fibre has been rolled out, it's always an alternate operator that starts the process," Mesch said. "He performs and improves the economics and the service capabilities and the incumbent then responds later."

The role of altnets in the evolution of the global telecoms sector will be a key area of focus at the forthcoming Gigabit Access 2018 conference. Held in Brussels from 10-11 April, Gigabit Access will showcase the industry's most influential players through a meticulously planned conference agenda. Click here to find out how you can be involved in the event.