Full Fibre UK ISP and AltNet Toob to Focus on Growing Take-up

Nick Parbutt, the boss of network builder and UK gigabit broadband ISP toob, has revealed that the operator may have changed its strategy to focus more on growing customer take-up than on expanding their network coverage. But at this stage it’s unclear whether this will impact their existing coverage target.

The operator, which was originally backed by £75m from the Amber Infrastructure Group (here) and “up to” £87.5m from the Sequoia Economic Infrastructure Income Fund (here), recently secured £160m of additional funding (debt financing) from Ares Management‘s Infrastructure Debt strategy (here) – this can be upsized up to £300m over time to support future growth opportunities.

However, while the fresh investment will have done a lot to help, it’s also true to say that network operators – more broadly – are currently under a lot of strain, such as from rising levels of competition (price and overbuild etc.), rising costs (e.g. leases, build, inflation) and the need to generate a good level of consumer take-up in order to satisfy investors.

Often those pressures can make it harder for some to attract fresh funding (an issue toob has so far managed to avoid), which may result in a slower build and related job losses as operators switch to focus on growing take-up. In toob’s case, they’re still building across their previously announced locations, but in a new interview with FibreProvider the publication states that toob’s “current focus is on growing its customer base“, rather than build.

Nick Parbutt, CEO of toob, said:

“In the current market, financing is critical. Over the last few years, the industry has enjoyed access to cheap money, but this is no longer the case.

With risk profiles changing, investors are looking more critically at businesses and backing only those they believe have a sound strategy and the ability to execute.”

At this point it’s unclear what this means for toob’s future roll-out plans and existing coverage target, although there’s no indication of any looming redundancies and in any case such things would be unlikely to follow so soon after a major funding announcement. Toob thus seems to be taking the prudent approach, by keeping their engineers focused on existing builds and putting more effort into growing take-up. Time will tell.

Customers of the service typically pay just £25 per month on an 18-month term for their 900Mbps (symmetric speed) package (£29 thereafter), which includes a router, unlimited usage, free installation and a pledge of “no in-contract price rises“. The operator also sells into a few parts of CityFibre’s rival FTTP network (that agreement also gave CityFibre some reciprocal access).