CityFibre raises £2.3bn to fuel network growth through M&As

The UK’s largest independent fibre network provider CityFibre has raised £2.3 billion in financing to fund a shift in focus to mergers and acquisitions as it looks to stay afloat in a very competitive market.

CityFibre, deemed an “altnet” provider due to its independence from the UK’s largest network wholesaler Openreach, connects 4.4 million premises through the UK's second largest full fibre network, but recently stepped up its M&A activity as it became clear it would not achieve a target to reach 8 million premises by the end of 2025.

CEO Greg Mesch said the funding would “supercharge CityFibre’s next phase of growth, as we consolidate the altnet sector, accelerate the pace of customer connections and unleash the full power of our market-leading 10Gb XGS-PON network.”

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The wholesaler, which marked its first fully profitable year in 2024, raised £500 million from its shareholders, expanded debt facilities by £960 million, and gained an accordion facility of £800 million to top up its reportedly dwindling funding this week.

As with many altnets, CityFibre has centred fast connections through its full-fibre network, when fibre cables lead directly to a customer’s premises, in marketing, but Openreach has also invested heavily in the sector and now reaches 19 million premises with full-fibre.

Project Gigabit and acquisitions

As a result, CityFibre, taken private in 2018, has boosted its numbers through acquisitions, adding Lit Fibre’s 220,000 premises in 2024 and Connexin’s 80,000 in March 2025, and will continue to use M&A to add more of the altnet’s 16 million premises to its network.

The new funding will also help CityFibre, which counts the UK’s National Wealth Fund as an investor, continue to capitalise on the government’s Project Gigabit, a £5 billion project to bring gigabit-capable broadband to 99% of UK premises by 2032. It currently has control of 10 Project Gigabit contracts worth £840 million.

CityFibre could also benefit from restrictions on Openreach's market activity proposed in Ofcom's Telecom Access Review consultation in March 2025, though regulatory changes may also make it easier for the larger wholesaler to invest in full fibre.