Ultrafast fibre optic ISP Gigaclear, which is rolling out a 1Gbps capable Fibre-to-the-Premises (FTTP) broadband network to rural communities across the United Kingdom, has bagged some additional investment in the form of a €25m loan.
So far Gigaclear’s network has already become available to roughly 15,000 homes and businesses in rural parts of Oxfordshire, Essex, Kent, Northamptonshire, Cambridgeshire, Leicestershire, Berkshire, Hertfordshire, Rutland and Gloucestershire in England.
On top of that the ISP, which currently owns and operates 56 rural fibre networks (plus 35 under construction), has also signed a number of Government (state aid) supported Broadband Delivery UKcontracts (e.g. Gloucestershire – here, Essex – here and Berkshire – here etc.) and they hope to reach approximately 40,000 premises by the end of 2016.
However beyond that they also have commercial plans to reach another 30-40K premises (around 80,000 total), which is likely to require further investment. Gigaclear has already managed to attract£48.6 million in investment and now they’re about to get another €25m (£19m) via a loan.
The FT states that most of this loan will be coming from the European Investment Bank (EIB) and indeed it’s said to be the EIB’s “first targeted support for rural communications in the UK“, as well as also being the maximum available under their InnovFin (EU finance for innovators) mid-cap growth finance scheme.
Matthew Hare, CEO of Gigaclear, said:
“We’re transforming lives and businesses, giving people access to the fastest internet speeds to be found anywhere in the world and technologically future-proofing these rural communities for years.”
One problem with the big spender approach to infrastructure development is that it will still take a long time to recoup the investment, not that this appears to worry Gigaclear or any of the other fibre optic ISPs.
Investors often seem able to see the long-term potential of fibre optic connectivity, which has also attracted them to other operators like Cityfibre and Hyperoptic. Assuming Ofcom doesn’t negatively upset that market too much with their Strategic Review then there’s no reason why this shouldn’t continue.
At this point it’s worth reminding our readers of Gigaclear’s “medium-term” target from their 2014 AIM float: “The Company’s target, assuming capital of £180 million (including the proceeds of the Placing) is deployed over the medium-term, is to make ultrafast fibre broadband available to 200,000 rural properties.”