Cityfibre: Network provider hits profitability in challenge to BT Openreach and Virgin Media
British telecoms company Cityfibre has hit profitability ahead of target as 1,000 new customers a day regularly join its network service.
The UK’s third-largest broadband provider after Openreach and Virgin Media, said sales for the three months ended 31 March 2024 spiked over 30 per cent year on year, after it added 77 per cent more customers, taking the tally to over 400,000.
This helped Cityfibre achieve positive earnings before interest, tax, depreciation and amortisation (EBITDA), ahead of its target to breakeven in the first half of the year.
Greg Mesch, chief executive officer at Cityfibre, said: “2024 has got off to a flying start for Cityfibre. We’ve achieved profitability ahead of schedule, increased revenues by more than 30 per cent, reached over 400,000 customers, secured almost £400m in new Project Gigabit contracts and acquired Lit Fibre.
“With a clear path to 6m premises we are making great headway towards, and potentially beyond, our 8m target. Over this entire footprint, we will offer our partners the best product, service and economics of any scaled wholesale platform in the UK,” Mesch added.
In March, the company announced its acquisition of internet provider Lit Fibre, which it said has boosted its nationwide full fibre rollout by up to 300,000 sites.
Cityfibre plans to close several more similar deals over the next couple of years as it chases its goal of reaching 8m sites.
Steve Holliday, non-executive chairman at Cityfibre, said: “Achieving EBITDA profitability marks an important milestone for Cityfibre. The UK market needs a third infrastructure platform of scale to ensure competition matures and that it continues to deliver for consumers and the country.
“As a profitable business, with supportive investors and enthusiastic ISP partners, it’s clear that Cityfibre is the core of that third platform.”
Alternative networks (altnets) such as Cityfibre, Gigaclear and Community Fibre, are posing an increasing challenge to the major full fibre broadband providers, BT’s Openreach and Virgin Media.
In November last year, Openreach warned it could lose more broadband customers as competition grows tougher.