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Gigaclear Scoop Gloucestershire and Herefordshire Broadband Contracts

Tuesday, February 7th, 2017 (1:31 am) - Score 1,596
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As predicted last month (here) the Gloucestershire and Herefordshire county councils in England have agreed to hand a major new broadband roll-out contract to rural ISP Gigaclear, which will deploy their “ultrafast” 1Gbps FTTP network to thousands of additional homes and businesses.

The decision was officially confirmed last week, although we don’t expect to see any details on the roll-out plan until Gigaclear has put pen to paper. The deal for Lots 3c, 3d, 3e and 4 (see below) will involve public funding of up of £5.14m from Gloucestershire County Council and £7.56m from Herefordshire Council, while Gigaclear is expected to contribute up to £29.2m of private investment.

At present we still don’t know for certain who will win the other two lots (Lot 3a – Cheltenham and Gloucester / Lot 3b – Hereford) because the Government’s Broadband Delivery UK office is busy conducting some due diligence checks.

However the councils, which jointly form the Fastershire scheme, have still agreed to award both contracts to the “highest scoring supplier” from last year’s procurement process, albeit only once the BDUK checking has completed. These two have a total value of £910K (public investment).

fastershire_phase2_broadband_lots

So far the Fastershire project has helped an additional 97,000 premises in both counties to be put within reach of a faster broadband service, albeit mostly via Openreach’s (BT) slower 80Mbps capable Fibre-to-the-Cabinet (FTTC) technology and just a little FTTP. The project’s “ultimate aim” isn’t very specific and merely states “that by 2018 there will be access to fast broadband for all who need it“.

Outside of that Gigaclear also holds the contracts to roll-out their ultrafast FTTP network to 6,495 premises in the Cotswolds area, as well as 2,600 in the Forest of Dean (Gloucestershire) and Golden Valley (Herefordshire).

We note that overall 15% of the properties in Herefordshire are now said to have access to “full-fibre” and growing, yet the overall coverage of “superfast broadband” (24Mbps+) networks in both counties still seems to be sitting shy of the 90% goal (it’s at about 90% in Gloucestershire but Herefordshire is only on around 82%).

The Councils Decision

Authorise the Commissioning Director: Communities and Infrastructure, in consultation with the Leader of the Council and Director of Strategic Finance, to:

(a) Award a contract to the highest scoring supplier (namely “Gigaclear”) that was identified in a competitive procurement process carried out by Herefordshire Council, (in its role on the joint Gloucestershire County Council and Herefordshire Council Fastershire project), for the deployment of superfast broadband in Gloucestershire (and Herefordshire).

Such a contract shall require Gigaclear to (i) deliver fibre broadband infrastructure within the areas described in Lot 3c, (South Herefordshire & West Gloucestershire), Lot 3d, (North Gloucestershire), Lot 3e, (South Gloucestershire) and Lot 4, (North Herefordshire) and (ii) provide gap funding in respect thereof.

The maximum value of such a contract, (for Lots 3c, 3d, 3e and 4), shall be £12.7m, (made up of £5.14m to be contributed by Gloucestershire County Council and £7.56m to be contributed by Herefordshire Council). Such a contract shall include an option to increase Herefordshire Council’s Lot 3c subsidy contribution by no more than £1.4m in accordance with the original published subsidy limit set out in the ITT.

Such an option may be exercised only if a delivery plan has been agreed by Gloucestershire County Council’s Commissioning Director. The term of such contract shall expire seven years after the final infrastructure payment is made, (anticipated to be December 2019). The said contract shall not be entered into with Gigaclear until Herefordshire Council has provided its approval, therefore;

(b) Subject to the positive conclusion of BDUKs due diligence, to award a contract to the highest scoring supplier that was identified in a competitive procurement process carried out between September and November 2016 for the deployment of superfast broadband in Gloucestershire (and Herefordshire). Such contract shall require the highest scoring supplier to i) deliver fibre broadband infrastructure within the areas described in Lot 3a (Cheltenham and Gloucester) and Lot 3b (Hereford).

The value of such contract shall be £910k (made up of £0.691m to be contributed by Gloucestershire County Council and £0.219m to be contributed by Herefordshire Council). The term of such contract shall expire seven years after the final infrastructure payment (anticipated to be December 2019). The said contract shall not be entered into with the highest scoring supplier until Herefordshire Council has provided its approval therefore;

(c) Take all operational decisions in relation to (i) the approved £0.58m of uncommitted funds detailed as “Future Procurements and Contract Extensions”, (ii) further ERDF and EAFRD European Funding (subject to approval); and (iii) the possible reinvestment of any underspend from previous stages of the approved Fastershire Broadband Strategy.

No doubt we’ll get some more details on precisely which areas will benefit in due course.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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20 Responses
  1. Avatar Matt

    If gigaclear can pull all these contracts off they will be a truly strong alt net in rural areas. This sound bad but was always worried they would remain very small. Not sure if exact numbers but imagine they will be near 500,000 premises after all the contracts and there own builds.

    • Avatar TomD

      I think our own commercial Gigaclear build is in danger of being canned or very significantly delayed. Their website today appears to have reset its registration totals and from being over 80% signed-up we are back down to <10%. Same for other local projects (Manuden, Clapgate).

      I'm concerned that Gigaclear's expansion on BDUK projects has actually put their commercial investments in doubt – maybe being so successful in getting subsidised projects has meant that the returns on commercial investment are nothing like so attractive.

    • Avatar TomD

      After clarification from Gigaclear I think I just misunderstood the changed wording on the website actually – the projects are “committed” and the registration requirement has been met. They’ve just changed the way the data is displayed.

      Although I still stand by my point that the commercial projects are in danger when competing against subsidised projects.

    • Avatar MikeW

      There’s certainly a risk that meeting their BDUK deadlines could cause the commercial projects to slip in time and importance. BT stand accused of the same thing.

  2. Avatar Fastman

    that brings then 2 quuesions —

    how long will gigaclear reamin as gigaclear as investors will want it sold to gain a substantial RIO — interesting that Warwicknet got brough out around a month ago

    2, The level of public scrunity on actual BDUK deployments will increase as the footprint expands

    • Avatar wireless pacman

      I would add a third:

      3) How well will their wholesale model develop?

    • Avatar NGA for all

      @FASTman surely the focus will be on BT. Why take subsidy for 25 cabinets in Ross-on-wye and 31 cabinets in Stonehouse where average premises served are above many commercial build? All of these monies will need to be repaid. Given the scale of the subsidies available to BT why withhold a more comprehensive coverage plan?

      The BT commercial investment in 476 cabinets in the two counties will be forgotten if gap funding is not seen to work and BT’s capital contribution is not verified.

    • Avatar Gadget

      @NGA, because premise count only affects demand-side considerations, and has no effect on supply-side issues like wayleaves, power, duct&fibre. Commercial viability depends on both coming together to make it work.

    • Avatar Peter

      In my village we also reckon GC will be sold by the private equity investors at some point.
      Most of us reckon Sky is the most likely to buy it.

    • Avatar NGA for all

      Gadget, surely those factors even out in large towns and I have allowed a large margin of error. We are dealing with the fundamental issue of £350m deferral, which needs to grow and grow to cater for the reality of phase 1 subsidy which needs to be returned while so much more coverage could have been planned and resourced given the money available.

      Of the 5,500 BT exchanges only 265 have been completed without subsidy. c3,100 have been subsidy led, while another 1,633 benefitted from subsidised in-fill, yet BT have not committed to a workable FTTP on demand product. The remainder have yet to have any work completed.

    • Avatar TheFacts

      @NGA – although ‘exchange’ is a convenient name for a random area of properties it is not relevant to your calculations where properties is the only measure.

      So BT have not committed to a workable FoD product. So? The options are they may or may not in the future. What’s your point?

    • Avatar NGA for all

      @Facts -ONe of the reasons for BT’s appointment was its ability to support future proof technology, which included a willingness to support fibre extensions into its access network.

      Given the funds available it is peculiar BT has not tooled up to do the work for which funding is available. Even a promise to do the work in the future would be helpful.

    • Avatar TheFacts

      @NGA – what do you understand ‘support fibre extensions into its access network’ to mean?

    • Avatar NGA for all

      @TheFacts a reasonable interpretation might be a capacity to support a demand led (minimum of 4 customers) FTTP GPON service with a variable connection charge based on distance from a splitter.

      It would remove a great many post codes from these iterative procurement processes while permitting some of the underspends or monies owed to pay for the ESS where they occur.

      The working assumption is the availability of spare fibres from the publicly subsidised AGN.

  3. Avatar Tim

    As I live in lot 3c I’m eager to see which properties will benefit form this – overall Gigaclear’s bid was to provide FTTP to 63% of the properties that don’t have fast broadband. That leaves a third of properties without.

    Since BT are retiring 20CN IPStream by the end of 2018, I’m not sure what will happen to that third once ADSL goes away in areas such as mine where that is the only choice.

    • They usually replace it with the 21CN/WBC ADSL2+ supporting platform.

    • Avatar Tim

      I’m not sure about ADSL2+ being installed, as I’ve been told there is no chance of ADSL2+ ever being installed in my exchange as there are not enough potential customers remaining now that it has FTTC. I expect the remaining properties may get FTTP or nothing.

  4. Avatar MikeW

    Is there information about the number of premises that Fastershire put into the IA of the lots? And how many Gigaclear intend to reach?

  5. Avatar fastman

    I buying a network — I reckon it will be some one you never heard of

  6. Avatar fastman

    weird post – don’t expect it to be sky (no appetite to own a network) probably someone you never heard of

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