The UK’s drive to give every home ultra-fast broadband was boosted on Tuesday when TalkTalk sold its FibreNation business to CityFibre for £200 million.
CityFibre, backed by Goldman Sachs, is regarded as one of the more innovative operators in the sector.
TalkTalk, which had its own plans to build a “full-fibre” internet network, has been planning to sell FibreNation for some time.
The sale was delayed last year when the Labour party said it wanted to nationalise BT’s Openreach network and give everyone free internet if it won the election.
TalkTalk chief executive Tristia Harrison said the deal was “good news for TalkTalk, and good news for Britain and its full-fibre rollout ambitions.
“Our investment over the last five years and the excellent work delivered by the FibreNation team, combined with CityFibre’s well-established platform, will support wide geographic reach of full fibre and further drive competition in the market.”
TalkTalk has lately cut its dividend as it sought cash to fund its internet ambitions. The cash from CityFibre will boost its balance sheet.
Talktalk was founded by Sir Charles Dunstone, 55, in 2003. It was spun out of what was then Carphone Warehouse in 2010.
Fibre broadband is regarded as faster and more durable than the copper wires that comprise most of BT’s older network. BT plans to replace copper with fibre. Virgin Media runs the other main internet network.
Greg Mesch, chief executive of CityFibre, said: “Today’s announcement establishes CityFibre as the UK’s third national digital infrastructure platform allowing millions more consumers and businesses to benefit from access to faster, more reliable services.”
He added: “The UK is a service-based economy, and this runs best on full fibre. Ensuring national coverage is critical and this can only be achieved by driving infrastructure competition at scale. This deal demonstrates the appetite from industry to see it established.”
Boris Johnson has set a 2025 date for making the UK’s internet purely fibre.
TalkTalk was advised by Lazard.