City fibre in real trouble?

Saw a news article saying city fibre are basically stopping any further network rollout apart from govt funded stuff and are aiming to get another 1mil premises via M&A. So much for the fully funded 8m target!

Takeup also seems to be very low - 20%. I suspect that may rise a bit when they get sky on board but deary me, somewhere like £5bn of funding to potentially cover 5m premises. That's £1k/premises, or £5k per served premises. If you assume they get maybe £20/month/premises (could actually be a lot less with heavy discounting to attract the likes of Sky) they basically cannot cover debt costs - and that doesn't include any opex whatsoever.

This M&A approach sounds good but often is a total nightmare to integrate businesses and they will probably get a lot of churn when they do that (as they don't want the retail side).

I really think they are snookered unless takeup increases massively, which is hard to see given they must have the most overbuilt network of anyone given their focus on big cities which have a lot of VM and OR competition.

I'm also struggling to see who would want to acquire them if they had to sell up - not OR or VM. Perhaps Vodafone?

Ohh but I've just seen them laying fibre along one of the main roads in Stevenage 2 days ago

CF just became available to me. They didn't get here first though; I have FTTP from F&W Networks.

My current connection comes across the road from a pole. However CF have installed a toby box in the pavement at the front of my house.

To go from there into my house, they'd have to go under the grass verge, under a brick wall, under the driveway, and finally into the house. Expensive, and messy.

Why would I bother with them when I have a better option?

In reply to a post by AndyPandy:

Why would I bother with them when I have a better option?

In your case you don't, but in some parts of the country where regular high winds and trees falling, underground might be more reliable.

Or if you wanted a wholesale network that had a choice of ISPs.

Edited by jchamier (Wed 12-Mar-25 09:24:08)

In reply to a post by mr_mojo:

I'm also struggling to see who would want to acquire them if they had to sell up - not OR or VM. Perhaps Vodafone?

I don't think its at this stage, more the changes in the finance world mean the original plans aren't going to work, so switch plan. Acquiring other, smaller, networks that are already built are a known price and known return on investment.

CF does at least give you the choice of ISPs, unlike most of the small Alt Nets and Virgin/Nexfibre (today).

CityFibre confuse me a bit, I was under the impression they set out to provide a higher quality service than the incumbents without any of the baggage of operating a legacy network, and while they might have operated with these principles for a bit it now appears their objective is just to be cheaper. They do the Openreach thing of hiding behind their ISP customers but make it even harder to talk to them as well as giving different answers to different ISPs as I assume each ISP sends any complex questions to their account manager and there's variations with competence. Some of the ISPs they have operating on the network are awful and can't be bothered with anything that requires more effort than taking an order, so you get situations where the civils have been done but the database is wrong, and there's seemingly no way to fix it.

Then you have some of the bone-headed stuff they do like dropping a load of Nokia ONTs off the network for close to 24 hours and relying on ISPs to handle the support rather than being proactive about it, it feels like the company doesn't really know what its main selling point is.

In reply to a post by jpm:

CityFibre confuse me a bit,

They remind me of a company growing very fast. Originally regional they appear to have tried to "go national" and link up all the separate networks so that an ISP doesn't have to connect to each FEX separately. I assume if the costs of money had no changed radically in the last 2 years, their build projects wouldn't have been suspended.

Where my parents live only about 48% of the town has been constructed, but at least they build underground so have avoided the "poles" controvosy that is going to hit Openreach FTTP when they come along.

This was known when they filed their last accounts and was covered by some news outlets.

When they filed the last accounts, it was reported they only had enough funding for the next half year. They have since been seeking new funds. 500m equity agreement I think has been agreed by existing shareholders, but with the speed they spending, they will need more on top of that will probably be more financing.

In reply to a post by jchamier:

In reply to a post by jpm:

CityFibre confuse me a bit,

They remind me of a company growing very fast. Originally regional they appear to have tried to "go national" and link up all the separate networks so that an ISP doesn't have to connect to each FEX separately. I assume if the costs of money had no changed radically in the last 2 years, their build projects wouldn't have been suspended.

Where my parents live only about 48% of the town has been constructed, but at least they build underground so have avoided the "poles" controvosy that is going to hit Openreach FTTP when they come along.

CF use a mix of ways to serve, they are not exclusively underground service , plus why is there going to be a poles controversy when OR rollout FTTP , if the area isn’t currently ducted underground service but is DIG , it’s very rare that poles becomes the method of delivery in these areas , it’s much more likely that DIG areas will simply be deferred to a later date rather than sanctioning the installation of poles, unlike the Alt Net community, OR rarely put up poles in areas that don’t already have them

Edited by Iniltous (Wed 12-Mar-25 16:58:37)

In reply to a post by jchamier:

I assume if the costs of money had no changed radically in the last 2 years, their build projects wouldn't have been suspended.

According to announcements they haven't issued any debt in the past 2 years and the cost of what they have didn't change as fixed.