Network Rail Moots Sale of UK Fibre Optic Infrastructure Assets

Reports suggest that Network Rail’s large track-side fibre optic infrastructure, which carries all sorts of transport, video (CCTV etc.) and data communications, could be sold off or shared out through a wholesale or joint venture agreement in order to raise money for more railway improvements elsewhere.

Regular readers may recall that we first picked up on the possibility of a wholesale solution all the way back in November 2014, which stemmed from Network Rail’s application for Code Powers from Ofcom (here).

At the time Ofcom said, “[Network Rail] confirmed that it intends that its electronic communications network and system of conduits will be used to improve mobile connectivity along the rail corridor and that it will offer wholesale services to other telecom operators.”

Extended Ofcom Statement – 2014

It has explained that its planned network expansion would enable it to deliver and operate a high speed, high capacity national electronic fibre optical network infrastructure to transmit a variety of network and IP services to new geographic areas outside of its existing network footprint. Due to the coverage of the Applicant’s network, it has explained that this will serve to benefit the public as a whole as it is likely to increase competition in the provision of various broadband and telecom services in the future.

For these reasons, Ofcom considers that granting the Applicant Code powers would benefit the public.

The original news stemmed from another announcement about the expansion of Network Rail’s Dark Fibre infrastructure, which could be partly funded by the major mobile network operators and thus some degree of wholesale solution already seemed inevitable.

However the FT reports that a much more significant asset sale or joint venture may also be placed on the table during May 2016, which has apparently attracted a “deluge of interest” from potential investors around the world. Vodafone, Virgin Media and oddly even TalkTalk have also been linked to the proposal.

The possibility that Network Rail may also open up their cable ducts for operators to install their own fibre optic cables is another option, although it should be said that Network Rail’s infrastructure follows a very specific path and probably won’t make a massive difference to national fixed line “superfast broadband” coverage (doing this 5 years ago might have delivered more impact).

In exchange Network Rail hopes to secure some additional money for improving its network and enhancing on-board connectivity through improved WiFi and or better mobile communications etc. None of these ideas are new ones, but we’ve yet to see much movement (outside of the application for Code Powers).