Kcom has agreed to sell its national network infrastructure to CityFibre for GBP 90 million. The assets include 1,100 route km of metro network in 24 towns and cities, and a national long-distance network of around 1,100 route km that connects 22 towns and cities and offers connectivity into key data centres and wholesale internet peering points in London. Kcom will hold on to its local network assets in Hull and East Yorkshire and use the proceeds from the sale to reduce debt.
CityFibre said it has agreed an underwritten share offering to raise GBP 80 million for the purchase and will pay the rest by drawing on its debt facilities. The cost of Kcom’s assets is 45 percent less than building its own long-distance network, CityFibre said. CityFibre agreed to provide Kcom with access to the national network for up to 15 years, at a minimum cost of GBP 5 million per year.
Along with its existing assets, the takeover gives CityFibre a metro network in 36 markets, making its an alternative to BT Openreach for operators looking for wholesale ffibre access. The network will cover an estimated 24,500 public sector sites, 7,000 cell sites, 245,000 businesses and 3.5 million homes, or approximately 15 percent of the UK market.