TalkTalk has signed heads of terms with Infracaptial, creating a new company to drive the project

TalkTalk has announced plans to roll out fibre to the home (FTTH) broadband services to 3 million properties in the UK, as it looks to invest around £1.5bn.

TalkTalk will create a new company, in partnership with Infracapital to oversee the project.

"By signing heads of terms with Infracapital we are making good progress towards putting TalkTalk at the heart of Britain’s fibre future by building a full fibre network, bringing faster, more reliable internet to millions of homes and businesses. Looking ahead we see real opportunity to continue growing the core business whilst also investing in full fibre. We have therefore strengthened our balance sheet and temporarily reduced our dividend to take full advantage of the opportunities available," said Charles Dunstone, executive chairman of TalkTalk.

The new company will be 80% funded by Infracapital, with TalkTalk providing the remaining 20%.  

The potential rollout of full fibre services to up to 3 million premises in the UK comes following TalkTalk’s successful trials in York, where it has so far connected 14,000 homes and businesses to its fibre network. That figure is set to rise to 54,000 in the coming months.

In its Q3 financial report, TalkTalk said that it hoped to raise up to £200 million by accelerating its ongoing project portfolio. The funds will be invested in the company’s FTTH initiative.

TalkTalk’s share price fell by around 14% following the announcement on Wednesday evening, but has started to edge back up over the last 24 hours. TalkTalk’s shares are now trading at £1.072 per share on the London stock exchange.