- UK mobile operator announces new exclusivity arrangements with CityFibre
- Claims strong partnerships will get the fibre built out
- Still all to play for in the UK fibre broadband market
As we reported last week (see Mary Lennighan’s Vodafone will be key to UK telecoms dealmaking) the UK FTTx market was tipped to be preparing for a bit of an asset shuffle and general realignment with Vodafone in the thick of it.
Right on cue Vodafone announced today that it is restructuring its deal with CityFibre to accelerate fibre roll-out in the UK with a view to it becoming one of the dominant UK fibre partners. Plus, it and CityFibre have agreed to an important change in their terms of engagement. Meanwhile, in a sign that the market is set to consolidate slightly after an initial burst of fibre-enthusiasm, another UK player, TalkTalk, has announced that it’s selling its FibreNation fibre deployment to CityFibre.
The latest Vodafone move builds on the deal it signed with national infrastructure provider, Openreach last month to bring fibre to 500,000 households in Birmingham, Bristol and Liverpool, in addition to the 12 towns and cities being fibred up by CityFibre.
Despite all the positive talk and forward planning, at this stage the much sought-after “full fibre” build has only touched 11 per cent of UK premises, well behind the best in Europe. BT has expended a lot of energy and lost much good will over the past decade or so pushing much cheaper-to-deploy fibre/copper hybrid solutions such as VDSL2 (and attracting criticism for insisting on calling these ‘fibre’ services because fibre was taken out to the roadside boxes).
Now, with 5G gigaspeed mobile services just around the corner, this approach is seen as distinctly lacking, especially for mobile operators such as Vodafone which see fixed/mobile combined offerings as the way forward. 5G mobile services supported by copper broadband running at under 100 Mbit/s, won’t cut it. What’s required is ‘full fibre’, capable of running up and down at at least 1 Gbit/s.
To get there, Vodafone doesn’t need to actually fully own fibre, but it must make the converged environment work for it marketing-wise. That means having access to fibre which it either part owns, or has a stable, long-term arrangement to tap when required.
Its updated deal with CityFibre means the operator can offer Vodafone Gigafast Broadband on a rolling, 12-month exclusive basis as homes become available for service in each of the 12 towns and cities covered in phase one of the deployment. Previously, it says, the period of exclusivity was dependent on the total time taken to roll out the network in each city.
Vodafone claims the addition of other anchor tenants for CityFibre strengthens its ability to provide wholesale competition to Openreach and encourages faster deployment of FTTP networks.The new commercial terms cover the 12 towns and cities where CityFibre has already deployed, as well as the additional rollouts.
At this point in the development of broadband, without the promise of multiple tenants to offer broadband choice, the network would probably be unable to attract residential and business connections at an acceptable rate. Vodafone maintains its Gigafast service, designed to roll out over full fibre, is the sort service fibre deployers need to pull through customers.
“The only way the UK will achieve its digital ambition is through strong partnerships, and Vodafone is leading the way,” claimed Vodafone UK CEO, Nick Jeffery.
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