CityFibre lights up footprint expansion with Lit Fibre acquisition

Throwing down the gauntlet to Openreach and Virgin Media O2 as the UK’s gigabit broadband sector continues its rapid expansion, CityFibre is increasing its footprint by up to 300,000 premises by taking over leading alternative fibre network (altnet) Lit Fibre (Lit) from Newlight Partners.

Established in 2021 by Tom Williams and Ben Bresler, Lit Fibre describes itself as a vertically integrated altnet, comprising a network builder and internet service provider (ISP). It has a current footprint of over 200,000 premises across more than 20 towns in Wiltshire, Gloucestershire, Hertfordshire, Worcestershire, Essex and Suffolk, and serves a growing subscriber base of more than 9,000 retail customers. Its full-fibre internet services are currently available in Midsomer Norton, Radstock, Redditch, Melksham, Harpenden, Sutton Coldfield, Chippenham, Cirencester, Evesham, Clacton-on-Sea, Bishops Stortford and Sudbury, with installation underway in St Albans, Chelmsford, Welwyn Garden City, Stratford-upon-Avon and Potters Bar.

CityFibre said the deal also brings further “experienced and sophisticated” investors into its shareholder register. Newlight Partners was an early investor in leading altnet Hyperoptic, and its current investment portfolio includes metro and long-haul fibre specialist euNetworks.

The share-based takeover deal will see Newlight become minority shareholders in CityFibre, and the transaction is expected to be completed in the second quarter of 2024. Lit’s network comprises over 200,000 passed homes and up to 100,000 further premises in planned infrastructure roll-outs. It’s currently on track to deliver up to 100,000 further premises by early 2025, and its network is built exclusively using existing poles and ducts.

CityFibre regards Lit as having a “significant and complementary” network footprint that has been deployed to a high standard and uses compatible 10Gbps XGS-PON network architecture that it’s been rolling out across the UK since 2023. These attributes, it said, will help accelerate the speed at which it’s able to integrate Lit’s network and make it available to partners, while proving its ability to maintain the current service levels it provides its customers.

Post acquisition completion, CityFibre said it will begin to integrate Lit’s infrastructure into its nationwide network, including its passive, active and operational support systems. The integration is expected to be completed later this year, from which point ISPs will be able to access the same products, pricing and service experience across the extended footprint.

“Our self-build roll-out programme has already delivered more than 3.5m premises to our partners, and we’re excited to accelerate this even faster through targeted acquisitions like Lit Fibre,” said CityFibre chief executive officer Greg Mesch. “But competition is not just about scale, it’s about providing partners access to carrier-grade networks that reduce their costs to serve and improve the service experience they can provide their customers. The UK market needs a third infrastructure platform of scale to ensure competition matures and that it continues to deliver for consumers and the country. Our acquisition of Lit is a clear demonstration of our intent to establish CityFibre as the core of that third platform.”

In a joint statement, Lit Fibre co-founders Tom Williams and Ben Bresler said: “We are delighted that CityFibre has decided to acquire Lit Fibre, the first in their new targeted acquisition strategy. Just over three years ago, we established Lit to bring internet connections of the highest quality to towns across the UK. Along with our team, we’ve been successful in building an enviable reputation for quality and customer service that our customers rate highly. Our efficient build model and reputation for excellent quality and service has been recognised by CityFibre, and we’re looking forward to working with them in the coming months to complete the deal.

CityFibre also noted that the acquisition of Lit was the first of several deals it expects to close over the next two years, following its decision to pursue altnet acquisitions as a strategic growth driver towards and potentially beyond its eight million premises target, being a wholesale competitor to BT Openreach.