Broadband Merger on the Horizon
Two major broadband altnets, Truespeed and Freedom Fiber, are in advanced discussions about a potential merger. This collaboration could catapult them into the ranks of the industry’s biggest players, amid growing financial pressure to consolidate.
Background of the Companies
Truespeed has raised £175m in funding from Aviva Investors and has operations focused on the west of England, connecting 28,000 customers to its network last summer. The company merged with County Broadband last year, creating an operator that covers more than 175,000 homes. Freedom Fiber, founded in 2020, has established a presence in Cheshire and Greater Manchester, and has merged with VX UK Holdings to create a joint company with more than 285,000 premises.
Potential Impact of the Merger
If completed, the merger would create a group with access to more than 400,000 premises, according to industry analysts. This would be the latest in an industry burdened with billions of dollars in debt and at risk of being overwhelmed by a wave of bankruptcies.
Financial Strain in the Industry
The sector’s financial strain has been highlighted by the plight of companies such as G.Network, which had raised hundreds of millions of pounds in debt and equity financing. Gigaclear, in which Equitix also owns a stake, is expected to be taken over by its lenders after a failed sale process. CityFibre, the biggest player in the industry behind BT Group’s Openreach arm, completed a £2.3bn refinancing last year, leaving it well placed to drive industry consolidation.
Investor Involvement
Freedom Fiber is backed by world-class infrastructure investors such as Equitix and InfraBridge, part of the New York-listed DigitalBridge Group. A number of altnets have put themselves up for sale in recent months after struggling to raise the new funding needed to deliver on their standalone delivery plans.
