Cityfibre and Vodafone Name First UK City for 1Gbps Home Broadband UPDATE

Fibre optic network developer Cityfibre has today announced that Milton Keynes will be the first of several cities to benefit from their large-scale rollout of a 1Gbps FTTH “full fibre” ultrafast broadband network with Vodafone, which will initially aim to cover 1 million UK homes.

A few months ago Cityfibre announced that it had raised an additional £200 million of private investment to help expand their Fibre-to-the-Premises / Home (FTTP/H) network (here), which until now had largely focused on connecting up specific businesses and public sector sites in around 42 cities and large towns across the United Kingdom (expected to reach 50 by 2020).

However the operator proposed that their latest injection of funding could build on that approach by bringing their network to residential homes in 5 – 10 of their existing towns and cities from 2018. Cityfibre added that its mid-term target to reach 50 UK towns and cities could also provide an opportunity to deliver FTTH to “no less than 5 million premises” by 2025.

Since then Vodafone and Cityfibre have done a £500m deal to rollout FTTH (here). Phase One of this deployment – due to start during H1 2018 – will seek to reach a “minimum” of 1 million UK homes in up to 12 of their existing cities and towns, which according to Vodafone is expected to be “largely complete” by 2021.

After that there’s also the “potential to extend” this up to 5 million homes (approximately 50 towns and cities, representing 20% of the current UK broadband market) by 2025, which will require more investment. Today we finally learnt that Milton Keynes will be the first to benefit from this rollout and Cityfibre has committed £40 million worth of private investment in order to make it happen.

Nick Jeffery, Vodafone UK Chief Executive, said:

“Milton Keynes is fast becoming a UK leader for productivity and growth, with its economic prospects only likely to improve following the opening of the East West Rail project. We believe that residents deserve a digital communications service to match their ambitions. This is why we are providing gigabit-capable connections to transform the way we live and work.”

Greg Mesch, Chief Executive at CityFibre, added:

“The partnership between Vodafone and CityFibre aims to tackle the huge problem the UK faces in terms of digital inadequacy and will help fulfil our vision of a Gigabit Britain. We are at the early stages of creating the Gigabit fibre network that the UK needs and deserves, and with the announcement of Milton Keynes as our first project we are well on our way to making this vision a reality. Full speed ahead.”

We should point out that Cityfibre already has a 162km long Dark Fibre style network in MK, which it acquired from KCOM at the end of 2015 and then upgraded in order to better serve local businesses (here). This will essentially make up the foundation of their new FTTH service, which will have to take that fibre optic cable to each individual property.

The construction phase is due to start in March 2018 (first customers live by the end of 2018) and the aim will be to reach “nearly every business and home” in the city (a specific premises or % coverage target has not been supplied). Naturally Vodafone has already setup a pre-registration page for this service, which you can visit here: https://www.vodafone.co.uk/broadband/ultrafast .

Admittedly this isn’t the first time that Cityfibre has tried to deploy an ultrafast Fibre-to-the-Home (FTTH) network into residential areas. The operator also serves some homes via a legacy network in Bournemouth (under 20,000 homes passed) and they’re still rolling out to around 55,000 homes in the city of York with TalkTalk and Sky Broadband (here). We should point out that Sky has stopped investing in the York roll-out.

The deployment in York was considered somewhat of a test case and Cityfibre claims that it helped to demonstrate “strong demand” for Gigabit speeds, which is something that will be vital to achieve in order for their economic model to work. But to pull that off would require a strong ISP partner to help market the service at scale, which is why the deal with Vodafone is so critical.

Cityfibre and Vodafone hope to complement this effort by harnessing the Government’s new 5-year business rates holiday for new fibre networks (here), as well as the £400m Digital Infrastructure Investment Fund (here) and possibly some of the £200m that has been set aside to support innovative fibre optic and 5G projects in local areas (here).

Meanwhile Openreach are also still considering their own aspiration for a large-scale deployment of FTTP/H, which could reach up to 10 million premises by around 2025 (here) and at a cost of £3bn to £6bn (here). On top of that Milton Keynes is already well covered by “superfast broadband” (24Mbps+) networks via Openreach and 14% can get their FTTP, although obviously an affordable 1Gbps FTTH across the whole city is in a different league.

UPDATE 9:30am

We’ve just had a comment from Openreach (BT).

An Openreach Spokesperson said:

“We welcome the competition. For many years we’ve been the only major investor in Milton Keynes’ digital infrastructure, and as a result it’s now one of the best connected places in Britain with much higher full fibre broadband coverage than the rest of country (around 14% versus a national average of 2% according to Thinkbroadband).

Nearly all (98%) of Milton Keynes can order ‘superfast’ broadband services today from a choice of retailers over our network, and just 1% of households can’t access a service of at least 10Mbps.

We’ve invested more than £11bn into our network over the last decade and we’re continuing to upgrade urban areas like Milton Keynes as well as more rural locations that are much harder to serve.”