- CityFibre reported robust results for 2023 and remains focused on build, but is set to seek more funding as it continues organic and inorganic growth mission.
- DTCP is hoping to lure hyperscalers to the northern regions of Ireland with a new investment in cross‑border datacentres.
- Freshwave is seeking to expand its neutral host business as EE launches the first commercial services on its City of London small sites.
Infrawatch Weekly Briefing: bringing together the latest from around TelcoTitans and beyond
In the UK fibre altnet sector a buoyant mood among network builders may increasingly become tempered by a need to secure extra cash. CityFibre bullishly positioned itself as the power behind the UK’s ‘third core platform’ as it published its annual report, but also highlighted an imminent need to raise more financing to fulfil its ambitions. It joins Hyperoptic and a slew of other UK altnets that look set to be chasing the same finite financial resources over the next twelve months in the race for continued expansion.
Investment is continuing across the broader infrastructure sector, with KKR finalising an acquisition of software specialist IQGeo, which helps network owners better understand and monetise their assets, while DTCP is backing the build of twin data centres on both sides of the border in the north of the island of Ireland.
The potential for communications infrastructure to cause a nuisance has caused complaints from diverse quarters, with UK altnet BRSK under investigation for its approach to equipment installation, while astronomers are turning to AI to address the interference in deep space images recorded from Earth‑bound telescopes caused by LEO satellite constellations.
Headlines
- CityFibre’s annual report and results for the year to 31 December 2023 saw the fibre altnet exceed targets for the year as it continues to establish itself as “the core of [the UK’s] third platform” for ultrafast connectivity. While positive EBITDA is now on the horizon, the business remains in a capital intensive phase, and may need additional funding to meet its expansive ambitions. Full story: CityFibre on the hunt for more cash to fund capital-intensive fibre rollout
- UK neutral host network provider Freshwave welcomed a new paying tenant for its shared network in the City of London, with MNO EE the first to launch commercial services over 25 small cell sites in the Square Mile. More operators are set to launch capacity‑boosting services soon, and Freshwave is looking at opportunities to take its model across the country. Full story: EE goes live with London small cells on Freshwave infra
- KKR paid £333m (€397m) to snap up IQGeo, a geospatial software specialist that provides a physical inventory of the assets and infrastructure of operator networks. The private equity giant stated an intention to support the expansion of both the portfolio and geographic reach of previously AIM‑listed IQGeo post‑acquisition. In a TelcoTitans interview, senior figures at the Cambridge‑based business explained how the deep network knowledge it provides can transform operator’s monetisation efforts. Full story: IQGeo: KKR’s latest tech buy adds geospatial smarts to sprawling infra portfolio
- Infrastructure investment group Digital Transformation Capital Partners committed funding to Atlantic Hub, a datacentre business operating across the island of Ireland. The financing will support construction of ‘twin’ datacentres in Londonderry Northern Ireland and Donegal in the Republic of Ireland, offering up to 170MW of capacity with the hope of attracting hyperscaler customers to the region. Full story: DTCP gives Irish data centre player a cash injection
- As previously rumoured, the Italian government has come back with an official bid for Telecom Italia’s submarine cable unit Sparkle. In partnership with Asterion Infrastructure’s local subsidiary Retelit, the Ministry of Economy and Finance has offered €700m (£587m) for the business in a move that recognises the growing geopolitical significance of subsea infrastructure. Full story: Italian government returns with shinier Sparkle bid
- In Germany, Vodafone is finally “bundling the FTTH marketing potential” that has come through its partnerships with national fibre partners Telekom Deutschland and Deutsche Glasfaser. Two years into its fibre access agreements with the pair, the OpCo says it is now able to interconnect services from the rival operators and bring them together with its own offering. Full story: Vodafone Germany extends fibre offer after stitching together rival networks
- Infra investment group Global Infrastructure Partners is reportedly looking to offload a stake in Indian TowerCo Ascend Telecom¸ with several large private equity firms already said to be looking at a possible buy. The move comes just days after BlackRock sealed the deal on its $12.5bn (€11.3bn) acquisition of GIP, seeking to accelerate growth in the segment by merging the pair’s separate digital infra portfolios. Full story: GIP said to seek reboot in India after completion of BlackRock mega-buy.
The week in…
UK digital infra
- Hyperoptic released its accounts for the year ending 31 December 2023 with the veteran UK fibre altnet reporting operating losses of £63.1m on revenue of £93.4m, which was up 19% on a year earlier. Losses were up 25%, as a result of higher costs for network build and customer acquisition. Total losses for the year, when the cost of debt is included, reached £142m. Hyperoptic’s network now covers 1.5 million premises, up from 1.1 million a year earlier, while the customer base took a step forward too, reaching 312,000, up 17% from a year earlier. Hyperoptic is aiming to reach a total of two million premises within two years, which it estimates will demand £300m investment. KKR‑owned Hyperoptic will need to secure additional funding in the coming twelve months to keep up the pace of rollout, but remains confident that it will secure support. It noted that in May 2024 its shareholders had invested an additional £35m. The business has approaching 2,000 employees, with around two–thirds working on network and rollout.
- Ofcom launched an investigation into BRSK, the UK fibre altnet recently merged with Netomnia. The regulator is examining claims the business failed to comply with obligations to properly consult with local planning authorities before installing electronic communications equipment in parts of Birmingham. It emphasised the importance of proper consultation and indicated an update on the assessment of whether there are reasonable grounds to believe there was a compliance failure will follow “in due course”. The investigation appears to be part of a swell of concern regarding altnet installation of new street furniture with little evidence of recent collaboration between providers.
- UK Prime Minister Keir Starmer highlighted the confirmation of plans for investment firm Blackstone to commit £10bn to the development of an AI data centre in Blyth, Northumberland as a sign that the country is “open for business”. The private equity giant had been in talks since before Starmer’s election win with administrators of Britishvolt and the local council over the opportunity to pick up the assets of the failed electric car battery ‘gigafactory’ business.
- UK Telecoms Minister Chris Bryant claimed over 4,500 rural premises in Yorkshire can now access fibre broadband as a result of Quickline’s progress in rolling out its network under Project Gigabit contracts in the county.
- Bryant also heralded emerging 5G‑enabled technologies during a visit to the Digital Catapult 5G Immersive Lab in Newcastle. The site is being used by startups to test potential commercial applications of 5G, supported by Vodafone’s 5GSA capabilities, with Bryant noting the collaboration between local authorities and private enterprises to support innovation in the region.
- Cyber Security Evaluations Limited, the Huawei‑owned UK entity that scrutinises the vendor’s hardware and software for potential vulnerabilities, issued its accounts for the year ending 31 December 2023, showing revenue of £7.5m. All revenue is generated for services to Huawei UK, and was around 15% higher than a year earlier. The work of the company had previously been subject to oversight from a GCHQ‑led committee of government and industry security experts, but in recent years, following the designation of Huawei as a High Risk Vendor, the committee has been disbanded, with the Department for Science Industry and Technology now taking a greater role in any review that is undertaken, with public disclosure of any findings halted.
…global digital infra
- I Squared Capital‑owned digital infrastructure player EXA Infrastructure entered into a partnership with Macarne, which will see it provide the network solutions provider with access to critical backbone infrastructure that will support Macarne’s ambitions to develop a reliable and scalable global IP transit network. Macarne will use EXA’s six diverse trans‑Atlantic routes for links to Europe’s major connectivity hubs including Amsterdam and Frankfurt. Macarne called out the speed at which the deal came together while describing EXA as “not just… a vendor but a true partner”.
- Academics in the field of astronomy are turning to machine‑learning algorithms in an attempt to tackle the interference in data recorded from Earth‑based observatories caused by the rising presence of LEO constellations used for satellite communications. It has been suggested that some major telescopes could see one‑third of their images compromised by the satellites.
- The European Commission conditionally approved the acquisition of a controlling stake in the telecoms companies and underlying infrastructure of PPF Telecom Group by United Arab Emirates operator e&. An investigation into the planned €2bn deal that would see e& gain control of PPF assets in Bulgaria, Hungary, Serbia and Slovakia, was launched in April and, after an “in‑depth investigation”, European authorities gave the go‑ahead, as long as a set of conditions are fulfilled. The EC has added guardrails to the deal that it considers will prevent the risk of e& using additional funding and unlimited guarantees from its sovereign backers to distort the internal market and provide EC oversight of activity around contracts and investments to prevent unfair subsidisation of operations within the European Union. The commitments are valid for ten years, with potential for an additional five year extension.
Peoplewatch: latest digital infra movers
Paddy Paddison of Wildanet is to replace Malcolm Corbett as CEO of the Independent Networks Cooperative Association (INCA). Paddison said his priority in the new role would be “amplify[ing] our members’ voices in critical discussions around regulation, infrastructure, and funding”. Corbett, who founded the trade association, is to continue as an adviser to Paddison for the rest of the year. In his parting words, he reflected on the transformation of the altnet sector “from a visionary, rebel group to collectively matching Openreach” while also declaring himself open to new opportunities.
Cellnex is changing its Chair again, with Anne Bouverot stepping down after 18 months in the role. She is to be replaced by Oscar Fanjul, a non‑exec who joined the TowerCo board last year as part of a governance overhaul. Bouverot was recently appointed as the French government’s special envoy for the Global Artificial Intelligence Action Sumit.
Stephan Grillmaier, previously Head of Investor Relations at UK-based financing house Arcus Infrastructure Partners, has joined Digital Transformation Capital Partners as Head of Capital Formation, Real Assets, based in London. DTCP said Grillmaier will lead its “investor relations and fundraising efforts in the real assets space as the firm’s digital infrastructure strategy continues to grow”. DTCP’s more physical asset-oriented interests currently include Cellnex Netherlands (towers), Community Fibre and Open Dutch Fiber (next-gen broadband infra), and maincubes (data centres) — as well as Ireland’s Atlantic Hub, following the investment mentioned above.
Also on TelcoTitans
- TelcoTitans has taken a closer look at T.Capital, the latest manifestation of Deutsche Telekom’s technology investment strategy. A key element of the Group’s innovation programme, more than 30 entities are backed by the unit, although the level of returns it has received for its involvement remains unclear. Full story: T.Capital: a dip into DT’s growing tech funding pool
- Virgin Media O2 and Tesco joint venture Tesco Mobile became the first MVNO to break the £1bn annual revenue barrier in 2023, but its accounts for the year show a highly competitive market that has hit profits as smaller virtual network operators flourish. Full story: Tesco–VM O2 MVNO cracks £1bn sales nut