At least five British cities will get new ultrafast broadband networks next year to challenge BT and Virgin Media, according to alternative internet infrastructure CityFibre.
The company, which already has the groundwork in place in 42 cities and a full fibre-optic network in York, said work will begin in 2018 after it raised more than £200m on the stock market.
Greg Mesch, chief executive, said he was in advanced discussions with broadband providers towards joint projects to lay new lines into homes, connecting them to CityFibre’s existing fibre-optic trunk lines.
He said the new money, raised via a placing and a subscription offer, will help seal investment deals with providers currently reliant on BT’s Openreach subsidiary.
In York the company worked with TalkTalk and Sky. Vodafone is also looking at options for building ultrafast broadband networks in the UK.
Mr Mesch said: “We’ve got the firepower to move now.”
Openreach is also hoping to secure support from broadband retailers for fibre-optic upgrades to its network via a consultation due to begin soon.
Mr Mesch said: “Openreach is starting a consultation but I’ve been in consultation with these guys for three years.”
CityFibre plans to build full-fibre networks, which the Government describes as “gold standard” internet infrastructure, in at least five, and as many as 10, cities. Fibre optics provide faster and more reliable internet access than traditional copper telephone lines or cable.
Mr Mesch declined to reveal the first cities to get the new networks but said the investment would be focused where CityFibre’s existing infrastructure is most extensive. Leeds, Coventry and Edinburgh are all in the upper ranks.
Alongside the fundraising, CityFibre announced the £29m takeover of Entanet, a broadband wholesaler. The deal will help boost CityFibre’s turnover to around £55m this year, from previous forecasts of less than £25m.
The company is now attempting to refinance expensive debts of around £100m. Mr Mesch said CityFibre would be able to access cheap infrastructure loans, helped by a closer relationship with the Australian investment bank Macquarie.
CityFibre claims its networks could offer full-fibre broadband to 20pc of the country by 2020. Mr Mesch said its plans were on schedule and on budget in contrast to Virgin Media, which is struggling with its Project Lightning network expansion.
He said: “Virgin hadn’t built anything for almost a decade. We’re set up as a building machine.”
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