CityFibre on Monday agreed to acquire Kcom’s national network assets for £90 million, ramping up the competition with BT Openreach.
Put up for sale by Kcom in late November, the physical assets comprise 1,100 km of duct and fibre infrastructure in 24 U.K. cities, as well as 1,100 km of national long distance network connecting these cities to data centres and Internet peering points. The assets do not include Kcom’s networks in Hull and East Yorkshire.
"The U.K. now has a secure independent infrastructure alternative," declared CityFibre CEO Greg Mesch, in a statement. "Cities, service providers, mobile operato rs and investors have boldly embraced a new model of future-proof infrastructure provision and paved the way for its acceleration across the country."
To fund the acquisition and its network expansion, CityFibre has secured £180 million of financing, consisting of £80 million of new equity and £100 million of debt.
"These transactions will immediately increase the number of CityFibre’s metro footprints to 36 cities and enable CityFibre to target a total of 50 cities by 2020, reaching 20% of the U.K.," the company said.
Once Kcom’s infrastructure assets have been integrated, CityFibre’s network will connect 7,000 mobile base stations, 24,500 public sector sites, and 245,000 businesses. According to CityFibre, the company will be the U.K.’s second-largest wholesale network provider after Openreach.
"With our enlarged footprint and strong pipeline of cities demanding better infrastructure, we will continue to grow, offering existing and new partners an ever increasing opportunity to capitalise on a pure fibre future," Mesch said.
Kcom announced on 30 November that its national network assets, excluding Hull and East Yorkshire, were up for sale. The move is in line with the company’s strategic shift towards cloud services and away from the carrier market.
"Today’s announcement unlocks considerable value in relation to an under-utilised asset, built more than 10 years ago and which is no longer core to our strategy," said Kcom CEO Bill Halbert, in a statement.
