TalkTalk to partner with Infracapital on full fibre rollout

9 Feb 2018

Alternative British broadband provider TalkTalk has announced that it is in discussions with European infrastructure investor Infracapital with a view to providing ‘full fibre rollout across the UK’. In publishing a trading update for the quarter ended 31 December 2017, TalkTalk revealed that ‘heads of terms’ have been agreed with Infracapital with regards to the creation of an independent company in which the latter would own 80% and TalkTalk 20%. According to the altnet, it is eying potential equity investment of up to GBP500 million (USD696 million) – enabling total investment of around GBP1.5 billion – in order to provide full fibre-based connectivity to more than three million premises in ‘mid-sized towns and cities’ in the UK. It has said it will be a founding wholesale customer of the new company, providing a minimum volume commitment.

Separately, TalkTalk has announced a proposed equity placing with the intention of raising up to GBP200 million by way of accelerated bookbuild, with the net proceeds to be used to strengthen the group’s balance sheet, support continued customer growth and invest in long-term fibre-to-the-premises (FTTP) plans. Further, TalkTalk has confirmed it is cutting its dividend temporarily ‘to fund continued investment in growth and [its] share in FTTP investment’.

In terms of the company’s recent financial performance, meanwhile, TalkTalk reported headline group revenue growth of 1.0% year-on-year for the last three months of 2017, while it said that its EBITDA guidance for the current fiscal year (which ended 31 March 2018) is between GBP230 million and GBP245 million. In operational terms, TalkTalk reported 37,000 net adds for the quarter under review, noting a ‘strong’ on-net base growth in both retail and wholesale, while reporting that churn had reduced to 1.3%, compared to 1.6% in the corresponding period last year.

United Kingdom, Infracapital, TalkTalk