U.K. fiber network operator CityFibre is extending and expanding an existing relationship with network construction company Bechtel, one of its primary partners its ongoing nationwide Full Fibre buildout.
This news comes less than two weeks after CityFibre secured an additional £1.125 billion ($1.7 billion U.S.) to further finance its fiber rollout and enable the operator to participate in the Building Digital U.K.’s Project Gigabit rural broadband program.
CityFibre is aiming to address one-third of the U.K.--285 municipalities and 8 million homes--with fiber by 2025, and Bechtel already has been a key part of that effort. Bechtel teams have been fully integrated into CityFibre's organizational structure since September 2020, the companies said, and the latest agreement between the firms essentially formalizes a five-year extension of a previous agreement.
During that time, CityFibre has worked with Bechtel to mobilize its 25 network construction partners and manage more than 60 parallel full town and city builds. Bechtel has also helped to strengthen project controls to enhance operational management, establish controls around risk and change, and increase productivity, according to CityFibre.
The new agreement will see Bechtel focusing its mega-project capabilities in project controls, construction management, contracts management, and environment, safety and health on buildouts in CityFibre's north and southeast regions.
In the near term, these capabilities and other functional support provided by Bechtel will help CityFibre fulfill its plans to have more than 150 parallel full city, town and village builds underway by the end of 2022 and stay on track for its 2025 goals, CityFibre said.
"It's a pleasure to be extending our alliance with Bechtel after a hugely successful year as partners," Greg Mesch, CEO at CityFibre said in a statement. "Over the last twelve months, they have worked in lockstep with our teams to deliver an extraordinary acceleration of our rollout. This pace will only increase as we commence new projects and maximise the productivity of each build..."
The new financing is another important ingredient in the ongoing program. About £825 million of the new funding is coming via equity, with the addition of two investors, Mubadala Investment Co., which is participating through a partnership between the governments of the U.K. and United Arab Emirates, and Interogo Holding. The remaining £300 million is being drawn from banking facilities, with new banks joining a syndicate which already has provided an £820 million facility to CityFibre.
CityFibre will need to stay aggressive with its broadband ambitions, as the U.K. market has become flooded with fiber competitors, including BT Openreach, Virgin Media and CityFibre, Giganet, Netomnia, and newer entrants like France’s Axione and Trooli.