CityFibre is to acquire part of KCOM’s network infrastructure in a deal that it hopes will enable it to better compete with BT Openreach.
The company, which has been building up an FTTH network across the UK, is spending £90 million to acquire KCOM’s network outside of Hull and East Yorkshire.
Specifically, this includes 1,100km of duct and fibre network in 24 UK cities, as well as 1,100km of national long distance network that connects these cities to data centres and internet peering points.
The deal sees CityFibre’s footprint grow to 3,200km, covering 36 towns and cities, and reaching 3.5 million households.
It said it plans to reach 50 metropolitan areas by 2020, equivalent to 20 percent of the UK market.
Although not FTTH-based, KCOM’s network would “serve as a backbone” for a future rollout of FTTH network and services, CityFibre said.
As part of the deal, KCOM will continue to get access to the assets it is selling post disposal.
The operator, which has provided Hull and East Yorkshire with telecoms services since 1904, said it was selling up to reduce debt.
CityFibre said it would spend a further £90 million to accelerate the commercialisation of its wholesale fibre network.
Following completion of the deal, slated for mid-January, CityFibre said it would become the largest wholesale infrastructure provider after BT and the first challenger to the national incumbent, nearly 10 years to the day since the formation of Openreach.
UK regulator Ofcom is currently assessing whether Openreach should be structurally separated from BT as part of a wider review of the country’s telecoms market.
Operators, notably Vodafone, have been critical of Openreach’s performance.
CityFibre CEO Greg Mesch said: “This is the most significant event to take place in the UK’s digital infrastructure market in a decade.
“The UK now has a secure independent infrastructure alternative.
“Cities, service providers, mobile operators and investors have boldly embraced a new model of future-proof infrastructure provision and paved the way for its acceleration across the country.
“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.”