TalkTalk keeps results under wraps citing 'advanced negotiations' over FibreNation biz

Has it found an investor in £1.5bn venture to build 3 million FTTP connections?


TalkTalk has today delayed its financial results due to "advanced negotiations with interested parties regarding its FibreNation business".

The budget Brit ISP is currently hoping to roll out full-fibre broadband to three million homes via sister company FibreNation and has been in the process of winning funding for the £1.5bn venture.

Following its initial York Fibre to the Premises (FTTP) build with Sky and CityFibre back in 2015, TalkTalk had announced a joint venture infrastructure fund to fund further build-outs.

But as Philip Carse, analyst at Megabuyte, noted, the deal was ripped up in November 2018 when TalkTalk instead announced a new FTTP business, FibreNation, and began its search for a funding partner in May/June 2019.

FibreNation recently began its rollout to 61,000 premises in Dewsbury in August, with further plans to reach 100,000 premises in Harrogate, Knaresborough and Ripon.

Carse said: "Our working assumption is that TalkTalk will sell a majority stake in FibreNation to an investor or strategic partner, thus retaining an interest in the upside but taking the investment requirements and startup losses off its own balance sheet and P&L."

He said TalkTalk will likely be pitching for a valuation that mirrors other fibre deals, such Infracapital's £270m takeover of rural broadband provider Gigaclear, and reflect the fact that it has a ready-made customer base to migrate to the new networks.

"Due to ongoing advanced negotiations with interested parties regarding its FibreNation business, TalkTalk will update on its FY20 Interim results by the end of the week," it told the stock market this morning.

Since ditching its mobile division last year, TalkTalk has been keen to concentrate on its core broadband business.

In its last third-quarter trading update for the three months to June, TalkTalk said it had been making "good progress on finding an infrastructure investment partner for FibreNation". Total revenue rose 1.3 per cent to £187m for the quarter compared to the same period last year. ®

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