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The fibre network operator said that the sale could provide funds to increase its planned rollout by an additional 2 million
Back in March, it was announced that UK altnet CityFibre were looking to sell a significant minority stake in the company for up to £1 billion.
Now, CityFibre CEO Greg Mesch (pictured) has told The Mail on Sunday that the operator in talks with 20 potential investors to purchase up to a 30% stake in the company.
Currently, both West Street Infrastructure Fund (Goldman Sachs) and Antin Infrastructure Fund own a 35% stake in CityFibre, leaving the remaining 30% left up for grabs.
“You’ve got 20 different firms that want to be in fibre infrastructure in the UK. It’s a hot place to be. It’s a great market,” said Mesch.
Mesch explained that the additional funds generated from such a sale could lead to a major increase in the company’s rollout targets over the next five years. The company currently has goals of investing £4 billion in fibre by 2025, aiming to cover a million UK premises by the end of 2021 and 8 million by 2025.
According to Mesch, this target could be increased to 10 million if the potential £1 billion stake sale goes ahead.
It would also give CityFibre a much stronger financial platform from which to compete for rural fibre deployment contracts as part of the government’s £5 billion Project Gigabit programme.
Naturally, there will be much competition for this programme, with both BT and Virgin Media–O2 looking to scale up their rollout in the coming years, as well as a host of smaller fibre players. BT, for example, is aiming to reach 25 million premises passed with fibre-to-the-premises broadband by the end of 2026.
Nonetheless, Mesch is unperturbed by the scale of BT’s plans, suggesting that CityFibre could match the pace of their fibre deployment.
“We think we can get our build rate equal to or greater than BT’s build rate within the next 24 months,” he said.
CityFibre is increasingly positioning itself as the UK’s third major fibre operator and an cash injection from new investment could give them a boost at a time when competition is becoming fiercer than ever.
Will the UK’s Project Gigabit go far enough when it comes to supporting the development of rural broadband? Find out what the experts think at this year’s live Connected Britain conference
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