KCom starting to roll out its super-fast broadband

TELECOMS group KCom has connected its first super-fast broadband customers in selected areas of Hull and East Yorkshire.

The Hull-based group is upgrading its copper network with fibre, which will significantly increase internet speeds.

It said the first connected customers are seeing broadband speeds of around 100 megabits per second (Mb), much higher than initial plans for speeds of 50Mb.

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KCom believes the growing popularity of applications and devices such as tablet PCs, smart phones and online TV means Hull’s broadband capacity needs upgrading. The upgrade is a significant step up from the 2-6Mb per second speeds that most of Hull’s residents and businesses currently receive.

In a trading update yesterday KCom said: “The board expects the group to trade in line with expectations for the rest of the current financial year.

“The group continues to exploit successfully its enhanced capabilities and strong track record in the provision of services to multiple-site, national organisations.”

It added that an update on recent contract wins will be included in the interims announcement scheduled for November 22.

KCom said strong cash generation has been maintained, leading to a further reduction in net debt. Net debt at the half year is expected to be £76m, down from £82m at the end of March.

Analyst Mark James at Liberum Capital said: “An upbeat first half trading statement confirms ongoing strong cash generation, further take-up of bundled products and services and no capex bulge from the fibre roll-out.”

KCom said the money needed for the fibre roll-out is within existing guidance, which means costs have not spiralled.

The group said there has been further growth in its multi-year contracted order backlog and Smart421’s revenues continue to see strong growth.

There has also been strong revenue performance in KC, driven in part by customers upgrading their KC Talk packages. This includes customers taking up recently launched bundled packages.

KCom targets domestic and business telecoms in East Yorkshire via its KC arm, and big businesses and organisations nationally through its Kcom division.

The group said Eclipse, its national internet services provider, has seen further success in the SME market, with positive net business broadband additions throughout the period and growth in non-broadband sales.

KCom began trading as part of the FTSE 250 index on September 19, following its promotion from the FTSE Smallcap index.

The fibre roll-out will give KCom scope to increase its broadband penetration in Hull from 55 per cent, versus a national average of 68 per cent.

Currently, KC’s customers get a minimum of 2Mb, with more than 60 per cent receiving at least 6Mb.