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[Bowdon]

https://news.sky.com/story/talktalk-loses-connection-for-15bn-fast-broadband-deal-11547436

A £1.5bn deal to accelerate the rollout of fast broadband to millions of British homes has stalled amid a valuation dispute between TalkTalk and its prospective infrastructure partner.

Sky News has learnt that TalkTalk, the listed telecoms group, and Infracapital, an investment vehicle owned by the insurance giant Prudential, have reached an impasse after months of talks about a new joint venture.

Announced in February, the new independent company‎ was designed to act as a new competitor in the race to deliver full-fibre communications to homes and businesses across the UK.

Under the plans, the ‎JV was to be 80%-funded by Infracapital and 20%-funded by TalkTalk, which would also have provided a minimum volume commitment to the business by becoming a founding wholesale customer.

They set a target of reaching more than three million homes and businesses in mid-sized towns and cities.

Sources insisted on Wednesday evening that the talks between the two companies were still ongoing.

A City insider‎ said, however, that the discussions had stalled because of a disagreement about the valuation of TalkTalk's full-fibre trial in York, where its network has reached roughly 20,000 homes.

That figure is due to rise to more than 50,000 by the end of next year.

Bankers said that TalkTalk had been "disappointed" by the value that Infracapital was willing to attribute to the York trial, and that while heads of terms had been signed nine months ago, there was now a risk that they would not proceed to a full signing.

If the partnership does fall apart, TalkTalk is expected to pursue its ambitions to roll out a fast broadband network with another partner.

[burakkucat]

I wonder if that is impartial reporting by Sky?   

[Bowdon]

Dispute Puts £1.5bn TalkTalk UK FTTH Broadband Rollout into Limbo

https://www.ispreview.co.uk/index.php/2018/11/dispute-puts-talktalk-1-5bn-uk-ftth-broadband-rollout-into-limbo.html

A Sky News report has today claimed that TalkTalk’s proposed £1.5bn plan to roll-out a new 1Gbps Fibre-to-the-Premises (FTTP) broadband ISP network to cover 3 million UK premises may have stalled, which allegedly stems from a valuation dispute with investment partner Infracapital.

According to Sky News, talks between the Joint Venture partners are still on-going but they have reached a stumbling block. Banking sources are said to have claimed that the ISP was “disappointed” by the value that Infracapital had attributed to their “full fibre” trial in the City of York, which is said to cover 20,000 premises and is aiming to reach around 54,000 by the end of 2019.

The York deployment has been slow going since it was first announced all the way back in 2014. It was supported by an initial investment of £5 million from each of Sky Broadband and TalkTalk, while the network itself was then built by Cityfibre who already had an existing 10Gbps capable and 103km long fibre optic ring in the city (The York Core).

On top of that first £10m, the later expansion (i.e. building beyond the original commitment of 14,000) to reach 54,000 premises was estimated to require another £20 million, which ultimately had to come from TalkTalk since by that stage Sky Broadband had reduced their interest to that of a mere wholesale partner.

Despite this TalkTalk has previously stated that their roll-out in York had so far produced take-up of 35% for the first 14,000 premises and that build costs had come in below £500 per home passed, which is roughly where they wanted it to be. But clearly there’s some disagreement over how all of this should be valued and where the payback point will come.

Under the new £1.5bn plan announced on 8th February 2018, TalkTalk proposed to establish a new company (Infraco), which in turn would be 20% owned by TalkTalk and 80% by Infracapital (the infrastructure equity investment arm of M&G Prudential). The latter would contribute £400m and TalkTalk £100m (plus they expected take on c.£1bn in debt).

However, as we reported last Saturday, there have been no truly significant updates on the Infracapital project since it was announced. At the time we were hearing similar whispers to Sky News and warned that TalkTalk was at risk of being overtaken by rivals that had already made stronger commitments (Summary of UK Full Fibre Plans). But TalkTalk told us not to worry.

    A TalkTalk Spokesperson told ISPreview.co.uk (3rd Nov 2018):

    “TalkTalk plans to be at the heart of Britain’s full-fibre future. As the leading value-for-money provider, we want to ensure all our customers can access it at affordable prices.

    We’ve outlined our commitment to roll-out full-fibre to three million homes via a new infrastructure company, and we have already appointed a new CEO and Chairman. We’ll provide further updates shortly.”

[CarlT]

Infracapital can't see the business value of selling symmetrical gigabit built under commercial terms for £500 per premises passed for £25.50 a month?

Philistines.