CityFibre and Vodafone – Full Fibre Friends

By | November 9, 2017

Today’s announcement of the long-term strategic partnership between CityFibre and Vodafone was not entirely unexpected – Vodafone has been investing in fibre in other parts of Europe and CityFibre’s strategy has always adhered to a wholesale model.  The news broken in today’s FT may, however, have raised city analyst eyebrows in those quarters where fibre fundamentals have not yet registered.

Vodafone UK Chief Executive Nick Jeffery said: “Vodafone is already playing the leading role in building the Gigabit Society across Europe by providing customers with high-speed, high-quality broadband. The UK has fallen far behind the rest of the world, trapped by the limited choice available on legacy networks. We look forward to working with CityFibre to build the Gigabit fibre network that the UK needs and deserves.”  Tellingly the FT editors removed the comment about the limitations of legacy networks – so, even now, pink paper pundits may not have absorbed the full flavour unless they track down CityFibre’s own media release.

The quote from CityFibre’s CEO, Greg Mesch, gave more than a hint of the scale of their plans. “This agreement will unlock the UK’s full fibre future and is a major step forward in delivering our vision for a Gigabit Britain. With this commitment from Vodafone, we have a partner with whom we can transform the digital capabilities of millions of homes and businesses and establish an unassailable wholesale infrastructure position across 20% of the UK broadband market.”  And, of course, this is not just CityFibre’s vision for a Gigabit Britain – as Digital Minister Matt Hancock made abundantly clear last week in his address to the Broadband Stakeholders Group.

Campaigning rural groups will, no doubt, be delighted for their urban friends but should not despair of further access network inequity:  investor interest in fibre distribution has never been higher and the special needs of rural areas are now being addressed through a multitude of imaginative schemes ranging from the voluntary efforts of B4RN-like communities to the low-opex model of Gigaclear.  Long-term and future-proofed infrastructure investment on this scale across the entire UK demands that you only do it once and make sure it’s done properly.  City analysts might do well to note that the capital costs are in reality way below the scary heights that were once used to prop up short-term revenue-defensive schemes that are now seen as ‘unfit for future purpose’.

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UPDATE 10/11/17

In further commentary from TelecomTV it was noted that [CityFibre] ‘will also be an assist to Vodafone as it rolls out 5G in a few years’ time and requires faster backhaul connections from its macro network and from indoor small cells’.   This critical interdependence of 5G Mobile and Ultrafast Full Fibre is at the heart of government enthusiasm for far greater fibre investment.