Vodafone unveils mammoth UK broadband expansion with partnership to deliver Virgin Media-style broadband to 5m homes

by

Vodafone UK CEO Nick Jeffrey (left) with CityFibre boss Greg Mesch (Source: Vodafone)

Mobile giant Vodafone today announced a deal to roll out Virgin Media-style ultrafast broadband to 5m UK households and businesses.

The FTSE 100 firm has a signed a partnership with specialist CityFibre to plug fibre cables directly into premises across the country.

The majority of Britain's fibre broadband network – critical for delivering higher speeds – is connected to street cabinets, with the remaining metres bridged by old-fashioned copper wiring that can be over a century old.

Shares in Aim-quoted CityFibre rocketed on the news, jumping almost 30 per cent.

Today's agreement will see Vodafone work exclusively with CityFibre to deliver a "fibre-to-the-premises" (FTTP) network. Pockets of similar networks exist in the UK across a number of providers with Virgin Media the best-known brand for delivering such a product.

Vodafone has previously held talks with Virgin Media owner Liberty Global over a potential UK tie-up.

Work to plug in the first 1m premises is to start in the first half of next year and be completed by 2021. Coverage will then be extended, if both parties agree, to a further 4m homes by 2025. 

Vodafone UK chief executive Nick Jeffery said Britain's broadband had "fallen far behind the rest of the world, trapped by the limited choice available on legacy networks".

He added: "We look forward to working with CityFibre to build the gigabit fibre network that the UK needs and deserves."

The government, which pledged in its manifesto to boost Britain's broadband, said the partnership was an "important step".

Digital minister Matt Hancock added: "Reaching an additional five million premises by the middle of the next decade would be a significant contribution to connecting modern Britain."

Read more: Vodafone attempts to draw a line under a turbulent year

Transform

The deal will up the pressure on BT, which owns the majority of Britain's broadband infrastructure through subsidiary Openreach. Currently, it then leases lines to providers such as Vodafone to deliver broadband services.

Openreach welcomed news of the partnership, with a spokesperson saying it would "complement" its own plans to upgrade 2m premise with FTTP connections.

Boss Greg Mesch said the partnership with Vodafone would "transform the digital capabilities of millions of homes and businesses and establish an unassailable wholesale infrastructure position across 20 per cent of the UK broadband market.”

Meanwhile, telecoms regulators also welcomed the announcement. 

Ofcom competition group director Jonathan Oxley said: "This shows there is real momentum behind full-fibre broadband. We’re making it quicker and easier to lay these networks, which will help support the UK’s future economy. We want to see commitment to full-fibre investment right across the industry."

Read more: Vodafone plugs 80 per cent of Portuguese households into ultrafast internet