Vodafone has announced a strategic partnership with CityFibre that will align the company to reach its ambitious target of serving more than 8 million residents by spring 2022 with full fibre broadband services across the UK. Vodafone are not new to this strategic partnership, and this new deal expands on its previous commitment under the November 2017 deal to make available ultrafast broadband services to over one million homes across 12 cities in the UK.
The deal is also seen to build on Vodafone’s other strategic partnership with Openreach that was signed same time last year to expand gigabit broadband roll-out with speeds of up to 900Mbps.
The deal with CityFibre makes Vodafone the number one customer of CityFibre where they will be able to make more longer volume commitments within their business model capitalizing on CityFibre’s 8 million home rollout and £4 bn investment programme. This programme consists of rolling out dense full fibre infrastructure in 285 cities, towns and villages across the UK by 2025; making it simpler for Vodafone to deliver full fibre services across the country.
In terms of benefits to Vodafone, the deal enables Vodafone to accelerate the delivery of fast broadband services to specific regions quickly by making use of CityFibre’s national access network. The size and mechanics of the deal will also enable Vodafone to competitively price broadband services at a discount to customers.
Vodafone capitalizing on infrastructure competition in the UK
In addition to CityFibre’s deal creating the ambition for Vodafone in becoming the UK’s largest retailer of full fibre broadband, it also promotes wholesaling infrastructure in the competitive landscape by expanding full fibre networks across the UK. In GlobalData’s view the Vodafone and CityFibre deal very much supports the trend of increased momentum in the UK of ultrafast full fibre network expansion.
Like CityFibre, both BT and Virgin Media look to be on target in delivering gigabit broadband. There’s also been a growth of independent service providers that started to deploy their own fibre networks across the country. In addition, Ofcom’s role and changes in strategic initiatives in 2021 aims to boost UK full fibre broadband and competition. Thus, adding fuel to the expansion of full fibre ultrafast broadband deployment where a number of cities are still underserved with copper deployment.
In conclusion, the regulatory support and current levels of investment in infrastructure roll out across the UK will further accelerate full fibre broadband competition. This will in return enable operators like Vodafone to make significant commitments and enter into deals with independent infrastructure owners with excellent UK footprints to deliver competitively priced premium ultrafast broadband services.