Vodafone has inked a deal for a full-fibre network built by CityFibre, which could connect up to 5 million premises over the next eight years.
The network is expected to reach one million homes in 12 towns and cities by 2021, and could be extended to another four million in 50 locations by 2025, with construction commencing in 2018.
The initial build is expected to cost up to £500m over 20 years depending on demand.
The first customers are expected to be connected from next year, with Vodafone having the exclusive marketing rights while the network is under construction. The locations of the deal have not been disclosed.
The new network will compete with established Openreach and Virgin Media services following previous discussions attempting to negotiate a deal between BT's subsidiary and its customers to bring full-fibre networks to internet users nationwide.
Openreach is consulting on plans to bring fibre to 10 million homes by 2025. It has said that programme will cost up to £6bn and in return wants its communications providers to commit their customer base to full fibre.
Vodafone has a sizeable footprint on the continent but lacks presence in Blighty. UK boss Nick Jeffrey has previously said fibre is an area Vodafone would like to invest in but believes the attempts to open up BT's network "haven't done enough".
CityFibre has carried out full-fibre projects in 42 towns around the UK, including a network in York with the backing of Sky and TalkTalk.
The initial 12 towns selected for the new network will be drawn from these locations, and will be announced gradually over the coming year.
In typically understated fashion, Jeffrey said the deal was "the most significant development since the start of broadband" for the UK's infrastructure, and that Vodafone and CityFibre "are really taking the lead in building Gigabit Britain".
CityFibre CEO Greg Mesch said the new network would offer "proper competitive choice that industry has been screaming for for over two decades", and that partnering with Vodafone was "the perfect formula" for upgrading Britain's infrastructure. ®