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Gigaclear Interview – The UK Challenges of Building Rural Full Fibre

Saturday, October 16th, 2021 (12:01 am) - Score 4,896
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The Head of Public Policy and Regulatory Affairs at broadband ISP Gigaclear, James Fredrickson, has today highlighted to ISPreview.co.uk some of the challenges they face in rolling out their gigabit-capable Fibre-to-the-Premises (FTTP) network to rural areas, and why they’re well placed to benefit from future consolidation.

For those who don’t know. Gigaclear has been operating in the UK for the best part of ten years and their focus has always been fixed on extending full fibre broadband infrastructure into some of England’s remotest rural communities, which most other commercial providers tend to overlook due to the high (disproportionate) cost of deployment.

NOTE: Since 2018 Gigaclear has been owned by Infracapital (they also own or have stakes in Fibrus, Ogi, Neos Networks and WightFibre etc.) and has raised over £750m in committed capital.

Despite the challenges involved, the operator’s FTTP network has now covered around 240,000 premises across 22 counties in England (450 rural communities) and they’re currently aiming to reach 500,000 UK properties by 2023. The operator also ended last year with 439 employees, which is up from 337 in 2019 (summary of annual accounts).

At the same time Gigaclear now finds itself in a very different market from the one they launched into a decade ago. Today there are close to a hundred alternative network (AltNet) ISPs building full fibre networks (Summary of UK FTTP Build Progress) and that’s before we even count the huge expansion plans from Openreach (BT), as well as Virgin Media.

Whilst this potential investment brings the promise of better connectivity to remote communities, the economics of building in these areas is not supportive of multiple overlapping gigabit capable infrastructure operators. This is unlikely to be sustainable in the medium to long term and will likely result in a period of industry consolidation,” said James Fredricksonto ISPreview.co.uk.

James has been with the company for over 4 years, and before that he worked at Vodafone UK in its Corporate and External Affairs function. Suffice to say that he knows a thing or two about this market. “If consolidation does then occur, we think Gigaclear is well placed to benefit from that process,” said James, optimistically.

Naturally, we wanted to know a lot more about the provider’s view of the current market and their plans for the future, and James has been kind enough to oblige.

The Gigaclear Interview

1. Gigaclear have been deploying FTTP networks into challenging rural areas for some years now and you’re currently aiming to cover 500,000 premises by the end of 2023. So, to get us started, are you able to give us a little update on the network’s current premises passed, committed investment and take-up progress?

James’ Answer:

As of right now we’re at around 240,000 premises passed, across southern rural England. In some of the most mature parts of the network, our take up reaches around 50% and as things stand at the moment, we have raised over £750 million in committed capital.

2. As one of the most well-established alternative network (altnet) providers, you’ve surely seen a lot of change in the market since 2010. One of the biggest over the past few years has been the surge in new entrants, most of which have been fuelled by an influx of commercial funding from investors and more favourable market conditions / regulation etc. (something Gigaclear itself has also benefited from via Infracapital).

One of the catches with this is that you now have many more potential competitors to deal with than just the traditional players, and some of those are already in close proximity. What are your thoughts on this, and how are Gigaclear adapting to meet the challenge from a greater number of infrastructure and ISP competitors?

James’ Answer:

The altnet community has certainly expanded over the last few years. Whilst a large part of that proliferation has focused on build in urban areas, we have seen new operators declaring build plans in the rural areas in and around our current footprint.

This marks a substantial shift in our industry’s landscape; you don’t have to look too far back into the past to see the fixed network landscape dominated by an incumbent and a single large challenger; neither of which were investing in FTTP or prioritising rollout in rural areas. In large part thanks to the emergence of new operators in this space, the big operators have had to react to that challenge and increase the scale of their investment.

Whilst this potential investment brings the promise of better connectivity to remote communities, the economics of building in these areas is not supportive of multiple overlapping gigabit capable infrastructure operators. We aren’t then surprised to see new entrants making big declarations about their intentions to build in these types of location. This is unlikely to be sustainable in the medium to long term and will likely result in a period of industry consolidation.

For our part in responding to these changes, we have to continually improve on what we do. On the build side of the business, that’s meant continuing to accelerate our build rate, scaling our design processes and regionalising the operation of the business to be closer to the communities we are serving. We’re also increasing the number of wholesale partners we work with, as well as the size and effectiveness of our own retail function.

3. Gigaclear is an operator that specialises in connecting remote rural areas, which are incredibly expensive to tackle with FTTP technology. Can you tell us, which was your most expensive deployment (by per premises cost) and have you found any new ways to help bring the costs down over the past 3 years?

James’ Answer:

The ones that immediately jump to mind are laying fibre across the Clifton Suspension Bridge in Bristol and drilling under the River Severn. Whilst the costs associated with that work were significant, we had to accept them as it was the only viable way to bring gigabit capable connectivity to those areas.

In terms of bringing the costs down, PIA has made life easier in some places. But in some of the areas we are building in, it’s either not available as the Openreach infrastructure is buried directly into the ground or is in need of significant repair to be viable. This can mean that the benefit is only marginal and it’s not the magic bullet some hoped it might be for rollout, especially in rural areas.

The more material change in how we have driven down cost is the granularity of our planning and improving the scale of our civils contracting resources. When rolling out network in urban and suburban areas, there are usually multiple alternative network routes of roughly equal cost. Whereas in rural areas you can often be dependent on a single viable route. That means a single non-responsive landowner can hold up an entire community build. Whilst this is an enduring risk in rural rollout, we have improved our ability to quickly develop new build routes should we fail to secure land access on a critical path.

4. The award of Scotland’s R100 contract to BT for LOT 1 ended up being delayed for one full year by a legal challenge from Gigaclear (here) – what exactly happened there? Reports from the court room stated that Scottish Ministers had made a “manifest error” in the procurement process (apparently this related to the technical issue of bid scoring). But very little detail has emerged to clarify what specifically went wrong in the process.

James’ Answer:

I appreciate that it’s an intriguing topic, but unfortunately, I can’t discuss it. The only thing I can say is that we were very conscious that a legal challenge risked delaying the programme and we did our very best to limit that delay.

Please click over to continue reading on page 2..

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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.
Leave a Comment
14 Responses
  1. anon67884 says:

    Hello James / the Gigaclear team,

    Please bring your FTTP network to Worcestershire, many parts of the county still have no plans for a FTTP network! Your main threat would be Openreach in 2026, we aren’t exactly being prioritised in Worcs.

    I know that Worcester County Council weren’t helpful when this was discussed in 2017 (I believe the local Highways Authority were unwilling to discuss working around requirements to close roads in some areas, while work was completed), but please keep trying, lots of people here still have slow and unreliable connections.

  2. The Facts says:

    A rubbish response to the CDS question. They were incompetent, poor management. They promised more than they could deliver.

    1. anon67884 says:

      Does this comment have any thought behind it, or is it just angry venting?

    2. The Facts says:

      What is incorrect? People still waiting for decent speeds.

    3. Fastman says:

      anon cant answer the first (but there no longer plucky little altnet fighting against big nasty openreach Gigaclear.there funded by massive investment corporations and when you win BDUK contracts now you have stand up , do what you need to do and meet the milestones (BDUK milestones are relentless and you dont get paid until you meet the milestones (so you cant complain that it was hard and difficult – because that a given) – so 2nd probably and 3 is clearly correct) –

    4. NGA for all says:

      @fastman Gigaclear only ever got a whiff as BD Group blocked Openreach as the available BT capital got diverted to Sport as the expense of a more meaningful effort on the rural upgrades – late, sub-optimal solutions (FTTC-cure), no sight of BT capital, all of which need to be unpicked.

      This early for sale sign is the first call for help, despite the money available and should be a warning to Boris Gigagit proposals to overbuild what has already been subsidised at the expense of completing rural. The demand for > 100mbps services by those on 30-80MBps services is not proven by any means.

    5. A_Builder says:

      I would tend to agree with @fastman.

      Gigaclear were, initially, a plucky upstart trying to do what B4RN did but commercially.

      Now they have masses of cash behind them the same excuses don’t really wash.

      The general business model, wether that be build timelines or ROI, doesn’t seem to quite work hence the pretty clear retrenchment to larger settlements.

      Now, I can see how it makes sense to cover off a settlement and get subscribers onboard as this first mover advantage makes sense. I can also see that it then makes sense to build out from the settlement more slowly as nobody else will go near once the core settlement is covered off. But that is not how BDUK funding works: the package has to be done to claim it.

  3. Paul says:

    (Scotland R100 Legal)

    Nothing like a good bit of British Business Modelling.

    Bid to win the contract, then legally squabble in the snails pace of courts for years over who is doing this-that-and-the-other, meanwhile another competent provider walks right in and does it for them in half the time for half the cost of their legal bill.

    All this causes the British customer to lose out.

    Don’t Worry, it’s all part of “Build Backwards Britain” project right, keep us in the dark ages.

  4. AnotherTim says:

    If Gigaclear is to pass 500,000 properties by 2023, and have passed 240,000 in the past 10 years, how are they going to increase build rates to build more in the next 2 years as they have managed in the past 10 years?
    Is the answer to concentrate more on commercial builds in towns and larger villages and less on rural areas (that seems to be happening, speaking as someone in a rural area waiting for Gigaclear, watching the nearby towns and villages being prioritised).

    1. Jonathan says:

      The failure of other BDUK contracts won by Gigaclear would have been ample grounds to rule them out for R100. Noting that the R100 started before those contracts failed. You can also in exceptional circumstances change the rules, and Gigaclear’s incompetent failure in other contracts would be those grounds. If they can’t manage to build in the south west of England which compared to the highlands of Scotland is frankly basically urban the risk of failure of a Lot1 contract would justifiably be marked as too high to award.

      Also while there might have been a mistake in the scoring process correcting the mistake might not have put them ahead of Openreach. The fact that even after going to court Gigaclear are not building Lot1 shows they are in fact a bunch of bad losers and the reason he dodged the question is because he knows that to be the case. There name is justifiably mud in Scotland now.

  5. AnotherTim says:

    Is there anything Gigaclear can do to improve the updates it gives about their build progress?
    I’ve been registered for updates for 5 years, and I have received one update – inviting me to an online community meeting last December where we were told our cabinet would go live early Q3 2021. Since then we have had lots of traffic disruption, and our road verges messed up, but no updates, and no sign of anything going live. Much of the build area hasn’t been started yet despite the whole area being due for completion this quarter.
    Asking Gigaclear or Fastershire about progress produces various excuses (most of which I don’t believe at all), and promises of progress next month (the same as for the past 5 years).

  6. DG says:

    Whatever you do when Gigaclear passes your property make sure they put the little ground pot in place, otherwise you have to fight with them for months whilst they argue who is to blame. (GL54 region)

    Secondly I am still waiting on a reply relating to them setting bridge mode for me after raising multiple tickets during the middle of 2020 … I have a feeling it will never materialise because I need to be onsite when they do and they never get me a date / time.

  7. HR2res says:

    I live in “hard-to-fttp” rural south Herefordshire. About 3 years ago now, Gigaclear, having had some success with earlier Phase 2 contracts in the Fastershire area, bid for and won the Fastershire Phase 3 contract for rollout of fttp in our area. The impression we locals now get is that they bid for that contract without really knowing the “lie of our land”, and now it is looking increasingly likely they are retreating from their contracted undertaking because it is too difficult/not economic (but that was the reason the contract was being offered!!). We will know for certain in a few more weeks, once their “review” is completed. But their direction of travel seems pretty clear.

    We didn’t expect it (i.e. decent broadband, better than 0.5-2 Mbps down/0.1-0.6 Mbps up) “yesterday” or “today”, or even “tomorrow”. Sometime “next week” was always acceptable. However, we’ve been sold the pup that is false hope for the best part of a decade now (and Fastershire have some hard questions to answer about this fiasco too, especially when the Gigaclear/Connecting Devon and Somerset issue surfaced at about the time of the Phase 3 contract award). If it hadn’t been for this peddled false hope, then we, as a wider community, would likely have taken the tack of B4RN, or more locally by Herefordshire Community Networks, and have been further advanced than Gigaclear were before they bid for their Phase 2 contracts.

    My current thoughts on Gigaclear? Well, in the unlikely event that after their review they decide to honour their Phase 3 fttp contract commitments then I’m likely to be slightly negative of neutral (after all, notwithstanding covid excuses, it’s 3 years since the contract was awarded).

    However, my best guess is that following the review they can best be summed up by rearranging “this” to form a well-known expletive.

  8. Andy says:

    There’s 200m of missing conduit in our local install and we’ve been waiting for Gigaclear to finish lay it for six months (they’ve had 3 road closure notices in that time)

    The conduit behind the house that it’s due to line up with was laid 18 months ago

    Now with Complete Utilities going bust who knows when we’ll get fibre

    With such chaotic build processes it’s no wonder they’re struggling… once the conduit is in the ground the priority should be to lay fibre and lite it so that they can earn revenue from it

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