Vodafone UK partners with CityFibre on £500 million plus Gigabit fibre network

Vodafone UK and CityFibre have announced a partnership that will bring Gigabit fibre broadband to up to five million homes and businesses in the UK by the year 2025.

The FTTP (fibre-to-the-premise) network will be built, operated and owned by CityFibre but under the terms of the wholesale agreement, Vodafone will have the right to a period of exclusivity (mostly during the build phase of each city network) - that will allow the telco to market consumer broadband services on the FTTP network.  Its duration? “Probably up to about to 3 years” said Nick Jeffery CEO of Vodafone UK, during a telephone briefing.

Greg Mesch, chief executive of CityFibre was keen to explain that once this period of exclusivity is over, the network will be open to all.

“We are a wholesale infrastructure,” said Mesch. “We are not a competitor at the retail level, all of our networks are open. The agreement only addresses the consumer side with Vodafone and they have some exclusivity during the build cycle. We would expect all major retailers to be across the scaled infrastructure and it’s just a matter of time, of when they come on.”

Though it should be noted that both parties have the right to extend the commercial terms of the agreement to expand fibre coverage to a further four million homes and businesses by the year 2025.

Construction of the first phase of the build out is due to begin in the first half of 2018 and will connect the first one million homes, completion is due to finish by 2021.  Additionally through this agreement both CityFibre and Vodafone are delivering 50% of the UK Government’s target of ‘full fibre’ to 10 million homes and businesses.

But what about Openreach? In the past the incumbent wholesale operator which owns the majority of the UK’s legacy network, has expressed interest in co-investing in fibre with the likes of Vodafone. Commenting on that Jeffery said: “We are a committed investor in fibre and we’ve got a very clear strategy. Although we’re very pleased to making this announcement with CityFibre, we are open to all options, no doors are closed. And what we want to see is a dynamic and competitive fibre market in the UK. Connecting as many homes and as many users as possible.”

In the past Jeffery has been very vocal in his disapproval of the “monopolistic” strangle Openreach has had on the UK’s digital infrastructure and only last month accused its parent organisation BT Group, of being “slightly selfish and delaying the rollout of 5G”.

A message that was echoed again today “The agreement with CityFibre provides us with access to a superior product, at a lower cost and with better service conditions than the regulated wholesale terms offered by the incumbent operator to access legacy copper telephone broadband network. The UK has fallen far behind the rest of the world, trapped by the limited choice available on legacy networks. We look forward to working with CityFibre to build the Gigabit fibre network that the UK needs and deserves.”

Mesch it seems agrees with Jeffery’s thoughts adding: “The market has been held back too long, with everybody almost being forced to consume from one major incumbent operator for too long. Infrastructure competition is good, it’s great, it’s great for the consumer and it’s great for the UK plc’s.”

When asked if the announcement was at all influenced by the UK’s imminent departure from the EU, Mesah said: “We’ve been working on this for 6 years and 10 months. It’s just coincidence that it just happens to be timed with BT consultation and Brexit. But generally speaking if the UK going to go on its own then one of the things a service based economy must know is that a service based economy runs on the internet and the internet runs phenomenally well on fibre.”

No official word has been given on which cities the FTTP will be deployed in, “we’ll be announcing those in a series of rolling announcements over the coming year,” said Mesch. “But it’ll be out the 42 cities we’re currently operate in.”

“This agreement will unlock the UK’s full fibre future and is a major step forward in delivering our vision for a Gigabit Britain. With this commitment from Vodafone, we have a partner with whom we can transform the digital capabilities of millions of homes and businesses and establish an unassailable wholesale infrastructure position across 20% of the UK broadband market,” concluded Mesch.

FTTP networks use fibre-optic cables for every stage of the connection offering broadband services capable of Gigabit speeds (1,000 mbps). And according to Jeffery they are undoubtedly superior to the old networks that rely on old copper telephone lines.

“The point is, relying on a copper network deployed in the last century in the belief that you can stretch that network to the limits of psychics and beyond in order to give this country the infrastructure its needs is frankly not credible. What this country needs is full fibre to the premise at scale.”

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