As first rumoured on these pages during April 2024 (here), two of the markets largest alternative UK network operators – Netomnia (YouFibre) and Brsk – both of which have deployed a significant amount of Fibre-to-the-Premises (FTTP) broadband ISP infrastructure to cover UK homes and businesses, have today formally agreed to merge.
Firstly, some context. Brsk is currently the smallest of the pair and have, thus far, been fuelled by an investment of at least £259m (mostly via Advencap and the Ares Management Corp), which has enabled them to cover 552,000 premises (536,000 Ready for Service) in England. The operator sells packages to consumers under the same brand (they have 41,200 customers) and, until today, were aiming to pass 1 million homes by 2026.
On the other side we have Netomnia, which is easily the largest of the two operators, having already covered almost 1 million premises and raising £795.5m of investment in the space of just three years (via Advencap, DigitalBridge and Soho Square). The operator, which sells its packages to consumers via sibling ISP YouFibre (they had 80,000 customers in March 2024), also held a tentative ambition to reach up to 2 million premises by the end of 2025 (1.5m is already planned).
However, the pair have long been linked to speculation about a possible consolidation, which is partly due to the fact that they share one of the same investors. In addition, both operators have managed to avoid overbuilding each other, and appear to share a similarly capital-efficient approach to build, which harnesses as much of Openreach’s existing cable ducts and poles (PIA) to run new fibre as possible (Netomnia spends an average of £250 per premises passed).
The newly merged group will thus have a combined network footprint of 1.5 million premises (RFS) and a customer base of 140,000 immediately post-merger, with a target of reaching 3 million premises (coverage) by the end of 2025.
Jeremy Chelot, CEO of Netomnia, said:
“By merging our network expertise and resources, we are creating a powerhouse to deliver an unparalleled internet experience for our customers, driving innovation and further consolidation among altnets. The additional capital from our investors and support from our lenders is a powerful endorsement of our vision and ability to execute at the highest level.”
Giorgio Iovino, CEO of Brsk, said:
“The merger is a testament to our shared entrepreneurial spirit and experienced teams that can deliver even more. Together, we are set to deliver a fibre network that is not only fast and reliable but also future-proof, ensuring our customers benefit today and tomorrow. Our joint platform will be where the most powerful internet lives.”
The official announcement notes that Netomnia and Brsk have already used £300m of debt and they “plan to use up to £900m of debt to grow the footprint to 3 million premises, demonstrating the companies’ prudent approach to capital management“.
Just for context, since 2020, Netomnia and Brsk have raised over £1.3bn of capital, with support from investors Advencap, DigitalBridge, and Soho Square Capital. DigitalBridge and Advencap will now be committing additional equity funding as part of today’s news.
The merger is set to be finalised in the coming weeks, pending regulatory approval (this will not be an obstacle), enabling customers to benefit from an “alternative FTTP platform that offers a seamless network experience, unified pricing, and enhanced service quality across the shared footprint.”
The deal will create one of the market’s largest Altnets, which will be much more readily able to challenge the leading players in this space, such as CityFibre, CommunityFibre and Hyperoptic. In addition, the combined entity creates a much more attractive wholesale option for ISPs, since scale is often a key factor for some providers when planning to invest in supporting a new network.
The newly merged entity will be led by Netomnia and YouFibre’s existing boss, Jeremy Chelot, as Chief Executive Officer (CEO) and Wil Wadsworth as Chief Financial Officer (CFO). Giorgio Iovino and Ian Kock will remain as CEO and Chief Operating Officer (COO), respectively, of Brsk.
Finally, I’d like to apologise for being slower than usual to cover this development, but even yours truly needs time off and a 1pm press release on Saturday tends to clash with lunchtime alcohol consumption and chaotic family life .