ISP Gigaclear Finished 2020 with 175,000 UK Full Fibre Homes
Rural broadband ISP Gigaclear, which aims to build their gigabit Fibre-to-the-Premises (FTTP) network to cover 500,000 UK properties by 2023, has published their annual accounts to 31st December 2020 and revealed that their network passes 175,000 properties (up 46K since 2019), as well as 36,000 customers (up 49%).
We should point out that the provider’s network passed figure of 175,000 doesn’t tell the whole story, since the number of homes that were actually “ready for service” (i.e. customers could take a live service) at the end of last year tends to trail behind this a little on 145,000 (up 46,000 over 2019).
Broadly speaking, Gigaclear’s rate of build has clearly improved over the prior report (i.e. in 2019 they added 36,000 premises to their network vs 46,000 in 2020) and, following last year’s debt financing raise of £525m (here), we fully expect that trend to continue when the next annual report is released.
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The ISP now has a presence in a total of 450 rural communities, across 22 counties of England (South West, Midlands and the South East) and they ended last year with 439 employees (up from 337 in 2019). We’ve summarised some of the operator’s other key figures below.
Highlights of the Annual Report (Results to Dec 2020)
➤ The network passed 175,000 properties at year-end (up 46,000 over 2019).
➤ 145,000 ready for service homes (up 47,900 over 2019).
➤ In H1 2020 Gigaclear built a monthly average of 3,000 properties (down slightly from 3,100 in H2 2019), but this hit 4,800 in H2 2020.
➤ November 2020 was a record-breaking month for the operator, which built to 6,500 homes (up from 2,800 last year) and sold to 2,100 customers (up from 830 last year).
➤ Total employees 439 (up from 337 in 2019).
➤ 130 new communities entered build in 2020 (up from 90 in 2019).
➤ Grew customer based by 49%, adding 12,000 (net) in the year (total of 36,000).
➤ Revenue increased by 25% to £14.1m (up from £11.3m in 2019).
➤ Losses for the year hit £46.6m (£33.8m in 2019).
➤ Operating expenses for the year were £45.2m (£40.9m in 2019).
➤ Gross debt of £176.5m (£29m in 2019) – mostly reflecting network construction costs (payback on building FTTP can take many years).
➤ Cash in the bank of £3.8m (£2.6m in 2019).
Broadly speaking, the results represent somewhat of a turnaround after the ISP went through a period of turmoil during 2018 and 2019, which was mostly due to problems caused by the previous management (new owners Infracapital had to correct this). In some areas, that resulted in the rollout being delayed by 1-2 years and the loss of their state aid supported contract in Devon and Somerset (here).
But clearly the situation is now improving and their pace of build is ramping-up nicely, which is all the more impressive given the COVID-19 disruption experienced in 2020. However, much like other ISPs that deploy FTTP into remote areas, Gigaclear’s biggest challenge going forward will be the rise in competition from rival operators, as well as the not unrelated difficulty of getting a payback on deploying into such disproportionately expensive areas (operators often work on payback expectations of 10-15 years).
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 X (Twitter), Mastodon, Facebook and Linkedin.
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At this stage is the take-up not disappointing? ~25% is pretty low given the level of investment. Premises passed as opposed to ready for sale is also a bit iffy.
I understood it would be tough but this is really hard going.
I mean 30% is quite normal.
In rural where subsidised then 60-70% is expected if gov/la is to meet its objectives.
20-30%+ is a fairly normal expectation for such operators, and such figures often shrink when a build enters into the ramp-up phase (i.e. building faster than adoption). To get a real idea of take-up you’d have to measure against only the areas where their network has been present for two years or more, and sadly we don’t have that data.
Remember, much of Gigaclear’s build is commercial, and even their subsidised builds have typically been funded by a disproportionate amount of private funding (i.e. more than match-funded).
Hmm at that level of demand, the basis for public funding is undermined.
You’d only expect to get to something like 60-70% after quite a few years (long-term forecasting) and probably only in non-competitive areas, if looking at a single network (unless it’s a demand-led build, then you might get there sooner).
In urban areas, with several competing networks, then the model is different because, even with a lower % of take-up, your cost to build vs customer density may still be enough to make it work. You’re all fighting over a split of the same pie.
So it just depends on what you’re looking at, where and over what timescale. A % in isolation isn’t much use as a measure. Context matters.
According to https://www.ispreview.co.uk/index.php/2021/09/forecast-predicts-488-percent-uk-growth-of-full-fibre-by-2026.html
UK FTTP takeup is forecast to be 36% (2.5m subscribers out of 7m passed) in 2021 and 74% (18.5m out of 25m) in 2026.
> UK FTTP takeup is forecast to be […] 74% (18.5m out of 25m) in 2026
Not surprising given that Openreach FTTP rollout in a given area is soon followed by copper withdrawal. People don’t have any choice!
In the villages near me, BDUK had FTTC installed a few years ago to replace USO level ADSL, which gives all the properties in the villages >70Mbps. Gigaclear have now built FTTP there, but most people haven’t yet outgrown the FTTC speeds (most are on the bottom tier), and FTTC includes a telephone line.
Gigaclear are having to cut prices to match FTTC, but when people realise they need to pay extra for VoIP or keep the phone line as well as paying Gigaclear for FTTP they just stick with FTTC.
I suspect a lot of the connections they have made are those in more rural areas with no other superfast options.
I think that is fair. After all as desperate as I am for a faster connection than my 35Mbps FTTC connection would I want to pay extra to go from say 70mbps FTTC to say 100Mbps FTTP currently? I guess I might as I’d love to hit those speeds and with WFH/Gaming so its maybe just about worth it for me but is it for people just browsing/watching streaming services (given than 90% of web users)…
Doesn’t help that Gigaclear’s pricing used to be terrible, effectively you went with them when they were the only non ADSL choice.
VOIP is a big decider for many, paying £7 extra per month (and that doesn’t include mobile numbers) will turn them off when the cheap FTTC packages are good enough for them.
Poor numbers. Poor take-up. Losing lots of money
Dude all thay keep doing is laying firber unpon firber stupid I got to wait from now and 2024 April before bt install full firber so it could be next week of 3 years from now stupid
We have Gigaclear and many in our village do as BT can do max 8mpbs. They did overbuild the other end (different exchange) with fibre but you don’t hear many people talk about it but I guess they may not even realise as it wasn’t promoted.
The lack of phone could certainly restrict them as although voip is not expensive when combined with the slightly higher price of Gigaclear it looks expensive, if they offered a combined service they would see uptake increase it was a consideration. I decided not to go voip as when I thought about it I couldn’t really remember the last time I used the phone. My wife was not happy but she soon got over it and we haven’t missed it. When we moved in the first thing I did was order and at that point self install was the cheapest option so that’s what i did. We’ve never hit a capacity limit its just not something that’s ever an issue. We do occasionally have some technical faults (Once every 6 months or so) but luckily have a strong 4G signal so can at least work.
Not available in Leicestershire. Strange