CityFibre Secures £2.3bn Funding to Challenge Openreach
CityFibre just secured a massive £2.3 billion in new funding. That’s a big deal, not just for the company, but for the future of fast internet in the UK. This money gives CityFibre the boost it needs to go head-to-head with giants like Openreach. Right now, they have already passed 3.6 million homes with fibre-optic lines. But they want to do more, a lot more.
We’re talking about better internet speeds, more choice for customers, and real competition in a market long dominated by a few big names. This deal comes at a time when many smaller networks are struggling or shutting down. So why is CityFibre growing when others are pulling back?
We’ll study what this new funding means, where the money is going, and how it could change the UK’s broadband game for good. Let’s break it down, in plain English, and see what’s going on behind the headlines.
The Surge of Full-Fibre in the UK
We’ve already seen an internet revolution. Since January 2020, full-fibre coverage has soared from 12% to over 78% of UK homes by mid-2025. That’s thanks to Ofcom’s 2021 push opening Openreach’s infrastructure to competition and encouraging new investment. But while 78% of homes can get full-fibre, only about 38% use it. This gap shows there’s huge room for altnets, alternative fibre providers like CityFibre, to grow.
Who Is CityFibre?
Established in 2011 by Greg Mesch and Mark Grahame, CityFibre focuses on bringing gigabit-capable fibre to overlooked towns and cities. Today, their network reaches about 4.3 million homes, but only 518,000 customers are connected. That means they’ve got strong momentum, but need more funding to convert potential into performance.
From Tight Spot to Turnaround
By late 2023, CityFibre faced a cash crunch. It warned it might run out of money by mid‑2025, as high rates and sector losses weighed heavily. The entire alt-net sector lost around £1.3 billion that year. Now, this new deal is exactly what the company needed to shift gears.
The Anatomy of the £2.3 bn Deal
Here’s the breakdown :
- £500 million equity from Goldman Sachs, Mubadala, Antin, and other investors
- £960 million in debt from major banks like NatWest, ING, Société Générale, and others
- £800 million accordion facility, extra borrowing if needed
This smart mix strengthens CityFibre now, while giving room for future growth.
What We’ll Do with the Money
Buy Up Altnets
We want to combine forces in the alt-net world. CityFibre already has four acquisition deals lined up. That includes All Points Fibre, which covers around 568,000 premises and posted a £35 million loss in 2023. Acquiring smaller rivals gives us better scale and savings.
Expand Customer Base with Sky
Our partnership with Sky is key. With over 5.7 million Sky broadband customers, this deal could double CityFibre’s subscriber count by the end of the year. Sky is already rolling out ultra-fast packages, up to 5 Gbps, over our network, starting at £70/month.
Fast Customer Roll-Out
We aim to jump from 518,000 to around 1 million customers this year. We’ll connect homes quickly and work closely with ISPs to drive growth.
Shaking Up the UK Broadband Scene
Since consolidating access, Ofcom’s moves have sped up full-fibre rollout speeds. But uptake is lagging. That’s our chance. More homes, better services, and fairer prices—this deal puts pressure on Openreach and Virgin Media O2. When Sky launched 5 Gbps packages on our network, BT’s stock even dipped.
How Analysts See It
Experts at Enders Analysis and New Street Research view consolidation as the only way forward. While some doubt we can add 480,000 users in one year, others say the Sky deal makes it possible . And with our first full year of profitability in 2024, with revenue up 34% to £134 million, and positive EBITDA, investors are feeling confident.
Risks to Watch
- Integration challenges: Absorbing acquired networks and converting them into active subscribers isn’t easy.
- Debt burden: We’ll face higher interest costs, which could squeeze margins.
- Conversion hurdle: With only 38% uptake so far, persuading customers remains tough.
Still, we’ve proven fast installs, high success rates, and 99.97% uptime.
What This Means for You
For people across the UK, this is big. More fast, reliable connections mean better options for home working, streaming, online gaming, and digital health. Increased competition forces providers to improve and innovate.
A Turning Point for Digital Britain
This £2.3 billion deal is not just a rescue, it’s a bold push for a full-fibre future. If CityFibre hits its growth and acquisition targets, we could reshape the broadband market:
- A more compact, stronger altnet segment
- Enforced upgrades from Openreach
- Wider access to ultra-fast, fibre-first internet
We’re on the edge of something transformative for connectivity, economy, and everyday life.
Final Word
CityFibre’s refinancing is a strategic leap. It shifts from survival mode to scaling up. Success depends on converting plans into connections, integrating new assets, and delivering for customers. If it works, full-fibre broadband could become not only widespread but the norm.
FAQS:
No, CityFibre and Openreach are different companies. CityFibre is a newer broadband network, while Openreach is owned by BT and has been around for many years.
Yes, CityFibre can use Openreach’s underground ducts and poles. Ofcom rules allow this, so smaller networks can build faster without digging new paths for cables.
Openreach is a company that builds and runs the UK’s broadband and phone network. It connects homes to the internet for providers like BT, Sky, and TalkTalk.
Disclaimer:
This content is for informational purposes only and not financial advice. Always conduct your research.