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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?
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Ohh but I've just seen them laying fibre along one of the main roads in Stevenage 2 days ago
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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?
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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.
25 years of broadband connectivity since Sep 1999 trial - Live BQM
Edited by jchamier (Wed 12-Mar-25 09:24:08)
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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).
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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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.
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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.
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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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.
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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)
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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.
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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 My town is a lot DIG from OR copper and two alt nets have been installing poles... I understand that altnet poles can't then be used by OR.
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
I assume OR won't do that, or they will never get the business back that has now gone to the Alt Nets or Virgin Media.
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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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. Makes sense, but perhaps that is why they've not issued more debt. Still trying to work out why they've stopped build in many half built towns.
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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Exactly. I actually read the telegraph article after this which says takeup is more like 12%.
They've clearly massively overspent on the rollout. They were saying they were fully funded for 8 million homes; but now they are out of cash at 4m.
They also have sort of the worst of all places where they are not as big as OR/VM for wholesale, but really spread out nationally so they can't do marketing and focus on a subset of areas.
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Communication has hindered them, a checker with no estimated dates.
I got VF leaflets through the door and emails from Zen more than a year before ordering was possible. So someone really messed up there.
The first leaflets I got after was available was from Toob several months after.
Very slow to build and wouldnt enable my street until several months after build (which for my street was just the boxes on the poles as it already had fibre for business services), because they wanted to wait to enable a 3rd of the city all at once, and even then was a long delay for backhaul links to the local FEX.
Ironically it looks like it was sky that pushed for XGSPON, its mentioned in the telegraph article and explains why when they announced the sky deal, XGSPON was in the same announcement. So not only was the build cost high, its made even worse that a lot of it was GPON.
I am grateful for them as CF is the only FTTP here, OR finally is planned, but it could be 21 months away. I think CF will still be an entity this time next year, but they not getting close to 8m properties.
OR did the areas they rolled out to probably 5x as fast as CF (CF did about 15-20% of city in 12 months, OR did about 70% in 7 months). I think this has ended up catching out CF, they perhaps didnt expect OR to react as nimble as they did. Ofcom approving lower OR prices obviously didnt help either.
Edited by Chrysalis (Wed 12-Mar-25 20:41:21)
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They've clearly massively overspent on the rollout. They were saying they were fully funded for 8 million homes; but now they are out of cash at 4m.
I assumed that was because prices for their suppliers (mostly workforce) will have increased over the last few years with the inflation etc.
I don't think it helped them having networks _exclusive_ to an ISP for 12/24 months after go live. Some people think CF are part of Vodafone for example!
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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I doubt it (though may be a factor). Netomnia CEO said on one of the excellent Zen youtube channel interviews they were doing something like £200-300/premises passed off the top of my head. They focussed a lot on microducting instead of PIA which means they are going to be vastly more expensive to roll out.
I suspect they had some very bad contracts with subcontractors where a lot more cost was passed up than they expected. This sudden stop with Kier for example would suggest something went quite badly wrong with their subcontractor relationships - https://www.ispreview.co.uk/index.php/2023/09/cityfi...
Pausing contracts like this will also really push costs up, because I bet a lot of civils work was done (and paid for) that won't be completed now.
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OR did the areas they rolled out to probably 5x as fast as CF (CF did about 15-20% of city in 12 months, OR did about 70% in 7 months). I think this has ended up catching out CF, they perhaps didnt expect OR to react as nimble as they did. Ofcom approving lower OR prices obviously didnt help either. I don't think an alt-nets can beat Openreach overall in terms of speed. They've mostly made gains while Openreach were asleep and thinking of things like G.Fast as a solution.
Openreach have a huge advantage. Alt nets need to run at least trunk connections themselves. They DO have deals for using very local Openreach ducting. But, that is generally as I understand it from the green box to the house in most cases. Whereas openreach have existing infrastructure (exchanges) and ducting in place already. So it's no surprise I think that they can roll out faster.
I think what will kill alt nets is if/when BT wholesale offer symmetric 1g/2.5g services at competing prices. To me, that's the only real USP you get from alt nets right now.
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Well, other alt nets arent as slow as CF.
The CF contract with the city was announced about 3-4 years ago, they had a massive head start, when they enabled the 3rd of the city that enabled my street, OR was just starting, and add in the delay to enable the FEX, CF even though they had a 3-4 year head start ended up with something like 2 months advantage in the OR areas. Thats just disastrous. My OR exchange area the gap is probably closer to 2 years, but most of the surrounding exchanges now have OR FTTP. Some of that OR circa 70% is also in areas CF didnt even do yet. Just embarrassing for CF.
Edited by Chrysalis (Thu 13-Mar-25 16:41:04)
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Pausing contracts like this will also really push costs up, because I bet a lot of civils work was done (and paid for) that won't be completed now.
Thanks for that ISPreview link about the Kier issue; and I agree that can't help the cost base at all!
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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Well, other alt nets arent as slow as CF. Toob for example have FTTP in 90% of my town, the only areas they have avoided is where the residents complained about telegraph poles being installed; so they've literally ignored/skipped those housing estates, so those residents have about 40 Mbps VDSL/FTTC or Virgin Media coax.
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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I like that they ignored the complainers by skipping them.
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Skipped entire estate. Some residents are very unhappy ; I call it a bit of a mess
25 years of broadband connectivity since Sep 1999 trial - Live BQM
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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. Makes sense, but perhaps that is why they've not issued more debt. Still trying to work out why they've stopped build in many half built towns.
They spent a lot more than planned for per premises and needed to reevaluate.
They were potentially thinking it'd come in around £500 per premises passed and spent over a grand a pop. Here they stopped virtually all build as Netomnia handed their backside to them and are finishing up the Public Services Network to satisfy the contract with the local authority, as much as possible with PIA.
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I totally understand why CityFibre didn’t use PIA - it’s difficult to claim to be the only true competitor to Openreach if you’re using all their ducts (though this didn’t prevent them from buying Lit). It just isn’t compatible with being a lower cost option to the incumbent because you’re going up against someone who did all the civils work five decades ago and paid it off a long time in the past.
The “what if” questions for CityFibre will always seem like a bit of a missed opportunity and I don’t think they have really exploited their network to bring any true innovation to the areas they serve. Where’s their street furniture access product? What about a layer 2 service that can connect several premises in the same FEX area aimed at SMB budgets? Why can’t people have more than a single connection per premises even if they have to be quoted for the work involved in splitting the PON they’re on?
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City Fibre do use Openreach assets extensively using PIA I’m not sure why you are suggesting they don’t , and the rationale that if they want to be seen as a true competitor they shun this option is risible, obviously in some circumstances they may decide to construct their own infrastructure, but I dare say in the majority of cases , if OR infrastructure is available it’s CF go to solution
Edited by Iniltous (Sat 15-Mar-25 10:14:10)
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City Fibre do use Openreach assets extensively using PIA I’m not sure why you are suggesting they don’t , and the rationale that if they want to be seen as a true competitor they shun this option is risible, obviously in some circumstances they may decide to construct their own infrastructure, but I dare say in the majority of cases , if OR infrastructure is available it’s CF go to solution
Yes. The CF cabinet visible from my house supplies me via an OR duct.
It's actually in OR's interest to have CF and similar using its ducts as the incomers check for blockages.
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City Fibre do use Openreach assets extensively using PIA I’m not sure why you are suggesting they don’t I said they didn't, not that they don't. The first lot of builds they did their own thing with microducts, and even on recent builds I have observed they are quite civils-heavy for things like routes back to their FEX.
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