A CityFibre spokesperson told Capacity: “Any speculation about a potential sale is unfounded. CityFibre is in a strong position and we expect to announce details of our financing shortly, supporting our role in consolidating the sector and accelerating CityFibre's next phase of growth."
According to the a report from the Telegraph, talks between the two companies are ongoing, with CityFibre exploring a potential equity or infrastructure partnership to bolster its balance sheet.
CityFibre has previously warned that its rapid fibre‑to‑the‑premises rollout, and resultant debt burden—standing at roughly £3.9 billion—could strain its financial position without further funding.
Earlier this year, it sought £1.5 billion via a mix of new debt and shareholder capital to support its expansion ambitions.
The discussions come amid a challenging environment for UK “altnets”: higher interest rates, rising build‑out costs and intense competition have put the sector under heightened scrutiny.
Despite that, CityFibre achieved its first year of profitability, with its revenues surging by 34% year-on-year. Community Fibre, another altnet, also recently reported its first full year of profit.
A deal with VMO2 would mark a strategic pivot for CityFibre, offering both a financial lifeline and a potential route to accelerate its rollout beyond the current 4.3 million premises served.
VMO2, which already lists the altnet Nexfibre among its major partners, may view the alliance as a chance to deepen its wholesale fibre footprint.
Earlier this year, some 96% of UK alternative network providers (altnets) revealed they were considering mergers, acquisitions, or partnerships to help them grow and survive in the broadband market, new data has revealed.
For CityFibre investors, a tie‑up with VMO2 could provide essential stability and help avoid the need for more complex refinancing or shareholder dilution.
The talks are reportedly ongoing, but the outcome may prove pivotal for both the altnet and the broader UK fibre landscape.
Both VMO2 and CityFibre have been contacted for comment.
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