Carillion telent Extends £1.5bn UK Engineer Deal with BT Openreach

Carillion telent has announced a 3-year extension (extendable to 5 years) to its framework agreement with Openreach (BT), which could be worth up to £1.5bn. They’re BT’s main delivery partner for the management, maintenance and upgrading of their UK “fibre broadband” (FTTC/P/G.fast) network.

The Carillion telent (60:40) joint venture has been working with Openreach for a long time (8-year partnership) and so the decision to extend for another 3 years will not come as a huge surprise. The deal also indicates that Openreach has some confidence in both their future direction and position within the market. On the other hand they’ll still need Carillion no matter what happens during Ofcom’s Strategic Review negotiations (here).

Apparently the framework is expected to generate up to £900m of revenue over the initial three years (Carillion’s share is over £500m) and potentially up to £1.5 billion over five years (Carillion’s share up to £900m), if the final two-year extension is agreed, which is itself subject to performance. The initial 3-year period runs until the end of 2021.

Richard Howson, Carillion CEO, said:

“We are delighted to have agreed this extension to our framework agreement with Openreach that reflects the strong partnership we have built with Openreach over the last eight years as its main delivery partner for the management, maintenance and upgrading of its broadband network.

We look forward to continuing this relationship and to supporting Openreach in delivering its objectives for further enhancing the services it provides for its customers.”

Under the deal Carillion will need to assist with the maintenance, extension and repair of Openreach’s telephone and data network in the North East, Midlands & Wales, South West and London & North Home Counties of England. The extension also includes the delivery of asset assurance works (e.g. poling and related activities) for England and Wales.

Mind you ordinary people don’t always see Carillion themselves as the company also subcontract out to local civil engineering firms, such as RPO Williams and HT Installations in Wales. They are the ones who dig the holes, clear the blockages or lay some track, put the cabinets up and so forth. Some of them also do cabling work.