VX Fibre is backed by InfraBridge, a division of $75 billion digital infrastructure investor DigitalBridge. InfraBridge will control the combined entity following the close of the transaction.
Freedom Fibre is backed by Equitix, a fund manager with $12.6 billion of assets under management.
The transaction combines adjacent fibre to the premises (“FttP”) networks focused principally on the North West of England and the Midlands with more than 285,000 premises passed.
Although controlled by InfraBridge, the company will operate as Freedom Fibre Limited and will be run by Neil McArthur, Freedom Fibre founder and CEO.
Darren Woods, currently Freedom Fibre Chief Financial Officer, will have the same role in the enlarged business.
Freedom Fibre launched in 2020 and offers wholesale-only services on its network.
It benefits from a long-term wholesale agreement with TalkTalk, a leading UK broadband provider. TalkTalk has been a minority shareholder since 2021 and will remain a shareholder in the combined business.
Freedom Fibre secured its first Building Digital UK (“BDUK”) gigabit tender earlier this year and during 2023 has begun offering a range of B2B products.
“The UK’s race to gigabit connectivity for the masses is about to enter its next phase. With more than 100 AltNets rapidly building out fibre networks, 73% of the UK now has gigabit-capable connectivity and we are well on track to meet the target of 85% by 2025,” Simon Willmott, Director for Wholesale at Neos Networks told Capacity.
VX Fibre markets its broadband service to local consumers in the UK through its LilaConnect brand, alongside a wholesale offering for local ISPs. It has a strong presence in Stoke-on-Trent where it has a contract with the city council, as well as fibre assets in Bristol and Colchester.
“Our businesses are highly complementary, including our geographic proximity, the quality of our network build and our retail and wholesale go-to-market strategies,” Damian Stanley, Managing Partner at InfraBridge said.
“We now have a platform with the support of TalkTalk to provide ongoing connections across the enlarged business.”
Convergence like this is essential if Altnet’s are to truly compete long term with the legacy ISPs (Openreach and Virgin), Neos’ Willmott said.
“AltNets must be able to deliver the same national reach and unified approach as their competitors. The focus is already shifting from reaching as many potential customers as quickly as possible, to converting, retaining and serving those users over the long term,” he told Capacity.
Willmott thinks that next year we will see more deals such as this, and at a faster pace.
“This will mean greater collaboration as they look to expand their capabilities and interconnect their networks,” he said.
“Prepare to see new partnerships and collaboration among AltNets and more deals with wholesale infrastructure providers that can connect these disparate networks. Without a strong connectivity backbone, altnets may struggle to collaborate and compete with the incumbent ISPs in 2024".
