TalkTalk is to become the dominant partner in a fibre broadband joint venture with CityFibre and Sky by buying out the latter’s stake.
The three companies have been building out an FTTP network in the UK city of York since 2014 as they look for an alternative to Openreach’s FTTC-based technology.
TalkTalk will acquire Sky's equity in the JV “in due course”, although it would not reveal what it could pay.
Sky will revert to being a long-term wholesale customer following the sale of its stake, while CityFibre will continue as a shareholder.
The announcement came as the three telcos revealed they plan to extend the York network, dubbed UFO, to 40,000 premises over the next 18 months.
The network has passed nearly 14,000 homes to date and over 2,400 customers have signed up to the service with both TalkTalk and Sky since the beginning of the year.
According to a statement, build costs are coming in “under budget” and customer take-up and satisfaction “is running ahead of targets”.
TalkTalk put the cost of the expansion at £20 million and said it hopes to hopes to connect 10 million homes to FTTP by 2025.
Sky and TalkTalk, along with Vodafone, have been vocal in their criticism of Openreach, claiming parent BT has underinvested in pure fibre technology.
The incumbent claims its approach, which now majors on G.Fast, is more pragmatic.
However, Openreach remains at risk of being split up as part of Ofcom’s review of the UK market.
Dido Harding, CEO of TalkTalk, said: “I have long been convinced that we need to be more ambitious when it comes to the UK’s digital economy, and upgrade our broadband infrastructure once and for all.
“What we are doing here in York is a clear demonstration of our commitment to playing our part in securing connectivity for everyone.”
CityFibre CEO Greg Mesch added: What we have delivered in partnership with Sky and TalkTalk has been truly ground breaking, leveraging our existing assets to deliver a state of the art fibre-to-the-premises network built efficiently and without the involvement of Openreach."