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Vodafone takes aim at BT through lightning fast telecoms network deal with CityFibre

CityFibre shares jump 23% on tie-up with mobile giant that will see up to 5mln homes connected
picture of fibre optic cables
Move over BT, gigabit society is coming

Telecoms giant Vodafone PLC (LON:VOD) and AIM-listed CityFibre (LON:CHFL) are joining forces to build a new ultra-fast broadband network for 5mln homes and businesses in the UK.

The fibre–optic FTTP (fibre-to-the- premises) network will be capable of carrying one gigabit (I,000 mbps) of data to the door of the user.

CityFibre will build, own and operate the network with Vodafone having exclusive rights to market ultrafast consumer broadband services for a set period.

Moving towards 'full fibre'

In the initial phase, costing £500mln, one million homes in twelve cities currently supplied by CityFibre will be upgraded. The agreement has an option to expand this to five million homes by 2025.

Broadband speeds are a huge source of frustration for UK consumers, with BT and telecoms regulator Ofcom at loggerheads over the speed that the traditional copper network is being upgraded.

Vodafone said the partnership with CityFibre represented “one of the most significant developments in UK telecommunications since the launch of ADSL broadband around 17 years ago”.

The new network would deliver 50% of the UK government's target of 'full fibre' to 10mln homes and businesses as well as providing high-capacity backhaul connections required for the next generation of 5G mobile services.

Significant development?

In a dig at BT, Vodafone added the new network would provide a superior product at a lower cost and better service than the legacy copper telephone line broadband network.

Greg Mesch, CityFibre’s chief executive,  said the partnership would unlock the UK's full fibre future and establish an unassailable wholesale infrastructure position across 20% of the UK broadband market. 

Nick Jeffery, Vodafone UK chief executive added: “The UK has fallen far behind the rest of the world, trapped by the limited choice available on legacy networks. “

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