CityFibre acquires TalkTalk's FibreNation fibre network

CityFibre has also cut a deal with Vodafone enabling it to cut wholesale deals with other ISPs sooner than originally agreed

CityFibre is to acquire TalkTalk's FibreNation fibre network in a £200 million deal that will also see TalkTalk sign-up as a major wholesale customer. The acquisition will make CityFibre the UK's third largest fibre network operator after BT and Virgin Media, but the deal is subject to the approval of TalkTalk shareholders.

CityFibre has also varied the terms of its agreement with Vodafone, loosening the mobile operator's exclusivity and enabling CityFibre to cut deals with other consumer ISPs sooner than originally planned. CityFibre's network has been behind Vodafone's Gigafast Broadband network, which is available across 11 towns and cities where CityFibre has built-out an existing network.

FibreNation emerged out of a joint venture between TalkTalk and Sky to build a trial fibre-to-the-premises network in the city of York. That was in 2014. TalkTalk then took full control of the venture with plans to rapidly expand the network to pass some three million premises, with Sky signed-up as a wholesale customer.

However, in November 2018 when TalkTalk announced the creation of FibreNation, it also revealed that it could no longer afford the £1.5 billion cost of building up the network - after announcing Harrogate, Ripon and Knaresborough as the first three towns FibreNation would expand into.

During 2019, TalkTalk therefore sought out buyers. FibreNation includes all of TalkTalk's fibre assets.

"The UK is a service-based economy, and this runs best on full fibre. Ensuring national coverage is critical and this can only be achieved by driving infrastructure competition at scale," said CityFibre CEO Greg Mesch.

The sale of FibreNation had been postponed in November after the Labour Party had pledged to nationalise BT Openreach and provide free fibre broadband for all by 2030.

It was unclear what might become of companies like CityFibre had Labour won the election, although in its manifesto the Party also pledged to provide jobs in nationalised Openreach for employees of other ISPs and network providers.

The Conservative Party manifesto, meanwhile, promised a full-fibre roll-out by 2025.