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UK altnets Freedom Fibre and VX Fibre, which is backed by infrastructure manager InfraBridge have signed an agreement this week to merge their businesses
The newly combined group will operate as name Freedom Fibre under their CEO Neil McArthur and his management team, and will have a network of 285,000 premises.
VX UK mainly operates in and around Stoke-on-Trent, but has fibre assets in Bristol and Colchester. Freedom Fibre, which was launched in 2020, offers wholesale-only services on its network, and had a long-term partnership with leading UK broadband provider TalkTalk.
“This is a strategic merger which leverages the strengths of both Freedom Fibre and VX UK to create a larger, stronger and more diverse business backed by two significant investors with ambitions for growth,” said McArthur.
Market consolidation is a hot topic in the UK industry at the moment – especially in the case of altnets. Currently, the UK has over 100 altnets rolling out fibre countrywide. The UK incumbent BT has long claimed that the current altnet landscape is too saturated and thus unsustainable. Therefore, it’s likely that more consolidation will occur looking into 2024.
Back in September, Virgin Media O2 (VMO2)’s nexfibre, acquired UK altnet Upp, a firm founded in 2021 who secured £1 billion of funding to rollout fibre broadband in the East of England.
“The UK broadband market is set to enter an era of scaled connectivity challengers, after first a period of dominance from the incumbent followed by a proliferation of altnets,” said Matthew Howett, Founder and CEO of Assembly research. “Altnets are a key piece of the connectivity jigsaw, but consolidation has been inevitable as new sources of funding dry up, focus on take-up intensifies and investors increasingly demand returns.”
The deal is subject to regulatory approval, but is expected to close by the end of next years’ first quarter.
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