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Fibre Wars: How long will BT hold onto its crown?

21/11/2018 · BT (BT.A)  · TalkTalk (TALK)  · Vodafone (VOD) 

FTSE 100

Fibre Wars: How long will BT hold onto its crown?
The provision of fibre optic broadband in the UK has the potential to be enormously cash generative for telecoms companies. As with most utilities, once they’re up and running, these cables will rake in the cash – especially as fibre optic broadband is in increasingly high demand. BT has long been the incumbent, but it’s facing competition.

It turns out building a network of fibre optic cables which will speed up the internet at 3m homes in Northern Britain is not as easy as TalkTalk (TALK) had hoped. Eight months after announcing that it had teamed up with Infracapital (an investment vehicle owned by the insurance company Prudential) to roll out full-fibre broadband, it appears that partnership will not continue. The problem, according to Sky News, centres around “a disagreement about the valuation of TalkTalk’s full-fibre trial in York, where its network has reached roughly 20,000 homes”.

No matter. TalkTalk will continue to target 3m full-fibre homes under its new business FibreNation. Building on its York trial, the next three towns to benefit will be Harrogate, Ripon and Knaresborough.

But there’s a problem – how will TalkTalk fund that roll-out? Under the original plans, the fibre ?joint venture was to be 80 per cent-funded by Infracapital and 20 per cent-funded by TalkTalk. The two…

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