Network Rail Shelves Plan to Privatise UK Fibre Optic Infrastructure

Network Rail appears to have shelved a plan that would have seen the national railway operator effectively privatise their large track-side fibre optic and data infrastructure, which carries all sorts of transport, video (CCTV etc.), signalling and others communications.

The operator has been looking at a solution to make more money from the infrastructure ever since they put in an application for Code Powers from Ofcom (here) in 2014, which revealed that they were planning to wholesale the network out to other ISPs and use it to boost Mobile coverage.

Earlier this year the wholesale proposal was followed by reports that Network Rail were mooting a more significant asset sale or joint venture, which apparently attracted a large amount of interest from potential investors (here). Now a new report from the FT confirms that the operator has “no immediate plans to progress” the privatisation.

The operator is said to have held talks with a number of major telecoms and broadband providers, which among others included Virgin Media and BT. Apparently BT was the front runner for some sort of Joint Venture or leased capacity arrangement, but in the end a mutually agreeable deal could not be reached and the talks stalled.

The Government are now rumoured to be keen for Network Rail to sell off some of their infrastructure in order to reduce its £42bn debit pile and as such we’ll probably be reporting on this again in the future. However Network Rail cannot simply hand over full control of its communications infrastructure to a new owner because they themselves still rely on it for various services, which complicates matters.

The other big question mark in all this is over how much Network Rail’s fibre optic cables would actually be worth to telecoms firms? The network tends to follow a very specific path and largely passes through areas that are already well served by a variety of other broadband and communications providers. Certainly there will be opportunities to be found, but equally it might not be worth as much as Network Rail would perhaps hope.