Aviva-backed altnet Truespeed in merger talks with rival | Money News

A fibre broadband network provider backed by an arm of Aviva, the FTSE-100 insurer, is in merger talks with a rival amid growing financial pressure on the heavily indebted industry.

Sky News has learnt that Truespeed, which has received £175m of funding from Aviva Investors, is in discussions about a tie-up with Freedom Fibre.

Negotiations between the two companies and their respective shareholders are said to be underway, although it was unclear on Thursday how likely they were to result in a deal.

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If successfully concluded, the merger would create a network with access to more than 400,000 premises, according to industry analysts.

Truespeed, which is concentrated in the west of England, in areas such as Bath, Somerset and south Gloucestershire, had connected 28,000 customers to its network as of last summer.

Last year, Truespeed merged with County Broadband, an altnet focused on East Anglia, to create an operator covering more than 175,000 homes.

Freedom Fibre, which was launched in 2020, has built a presence in Cheshire and Greater Manchester.

In late 2023, it reached an agreement to merge with VX UK Holdings, establishing a combined business with more than 285,000 premises passed.

Freedom Fibre is backed by blue-chip infrastructure investors such as Equitix and InfraBridge, which is part of New York-listed DigitalBridge Group.

A merger of Truespeed and Freedom Fibre would represent another step in the consolidation of an industry which has begun to show signs of serious financial strain.

A number of altnets have put themselves up for sale in recent months after struggling to raise the new financing required to deliver their standalone delivery plans.

The largest player in the sector, behind BT Group’s Openreach arm, CityFibre, completed a £2.3bn refinancing last year, which has left it well-placed to spearhead industry consolidation.

CityFibre, which has a commercial relationship with Sky, the immediate owner of Sky News, had more than 730,000 customer connections as of last autumn.

The financial strains on the sector are typified by the plight of companies such as G.Network, which had raised hundreds of millions of pounds in debt and equity funding.

This week, the Financial Times reported that it had been sold to Fitzwalter Capital, a distressed debt fund.

Spokespeople for Aviva Investors and Equitix declined to comment.

Neither Truespeed nor Freedom Fibre could be reached for comment.