Possible Broadband Boost as UK Gov Seeks GBP10bn Macquarie Investment
A number of weekend reports have claimed that the UK Government is close to securing a significant £10bn investment from the Australian-based Macquarie Group, which would go toward various British infrastructure projects in the digital infrastructure (i.e. fibre broadband and mobile) and energy sectors.
The Macquarie Group, through their various infrastructure focused investment funds and deals, are already a familiar name in the UK. Over the past 2-3 years alone they’ve acquired Hull-based “full fibre” ISP KCOM for £627m (here), while also gobbling other ISPs and broadband builders, such as Wavenet and Voneus. Such deals have often been followed by significant network expansion projects.
According to SkyNews, Downing Street has been in talks with Macquarie Group to secure the £10bn investment deal in British infrastructure – one of the largest-ever such commitments by an overseas company – for a “number of weeks“. The announcement would include several already known renewable energy investments, as well as some “new” projects in energy and the communications infrastructure.
Allegedly, the deal was originally due to be announced in mid-February 2022, during Boris Johnson‘s (UK Prime Minister) state visit to Australia. But this has since been postponed due, reportedly, to the PM’s ongoing domestic problems and other international challenges (e.g. Ukraine).
A Spokesperson for the Macquarie Group said:
“The UK is one of the best places in the world to invest in, and from. It’s our hub for operations across Europe, the Middle East and Africa, and we’ve been proud to invest over £50bn in critical UK infrastructure in recent years.
Over the next few years, we’ll progress important new investments in communities from Southampton to Orkney, in vital new infrastructure from offshore wind to ultra-fast broadband.”
At present, very little is known about how the new funding could be distributed and exactly what kind of broadband projects would be able to avail themselves of it. But it’s plausible that the funding might help to support the new UK Infrastructure Bank, or it could perhaps be setup in a similar way to the 2016/17 Digital Infrastructure Investment Fund (DIIF), which helped to boost funding for alternative full fibre networks.
The Government has declined to comment on the matter, but it’s expected that a formal announcement will surface once a new date has been agreed with UK Ministers. The £10bn itself is expected to come from a combination of capital from Macquarie’s own balance sheet and funds that it manages, although it’s unclear whether this could be further boosted with match-funding from the public purse (i.e. to go beyond £10bn).
Commercial investment alone currently looks all but set to achieve gigabit-capable broadband coverage across just over 80% of UK premises within the next 3-4 years, thus any additional investment in broadband is likely to be focused on the same area as the Government’s current £5bn Project Gigabit programme (i.e. the final 20% of hardest to reach premises). This aspires to achieve at least 85% coverage of gigabit-capable networks by the end of 2025 and then “nationwide” coverage by 2030 (here and here).
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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My first thought was rather cynical, in that I was (already) wondering if the Treasury are going to find it difficult to supply the promised money for Gigabit UK over the next few years, what with all the other post-covid issues arising.
Then I was a bit more optimistic (less cynical?), thinking perhaps it means that 5G(?) fixed wireless access will come to a rural area like mine a bit sooner than 2030.
All words empty promises by this corrupt Tory government since 2010 never trust a Tory it’s not levelling up its levelling down .
People only vote for them when the alernative is so bad, that it makes more sense.
Bobski says:
February 7, 2022 at 2:42 pm
People only vote for them when the alernative is so bad, that it makes more sense
Deluded bobski even mr bean can do a better job than the conservatives ffs .
“Deluded bobski even mr bean can do a better job than the conservatives ffs”
I suppose we could have have voted for Comrade Corbyn…. LOLZ
Bobski says:
February 7, 2022 at 3:18 pm
“Deluded bobski even mr bean can do a better job than the conservatives ffs”
I suppose we could have have voted for Comrade Corbyn…. LOLZ
Name 10 reason why the conservatives has done for this country
1 more food banks than uk banks
2 austerity
3 universal credit failure
4 dodgy ppe contracts
5 party gate corrupt Tory government
6 not levelling up its levelling down .
7 Brexit a complete failure you got duped you boot licker
8 Boris is a liar all his life
9 failure to sort the homeless
10 oh yes Jeremy corbyn was not A commie it was the msm were brainwashing yourself to vote Tory ffs
Suck it Tory voter I’m laughing at you not with you mug .
All your points pale into insignificance once you start to defend Corbyn. The antisemite was and is a poisoned little man…..you sound quite like him….is that you Jeremy?
Sigh! Read the article. The government hasn’t made an announcement. In fact, they “have declined to comment”, so there are no government words to over- or misinterpret.
A likely £10bn investment in the UK has got to be good, even if some of it turns out to be a replacement for (some) Treasury money.
Now, your politics are your own. And even though to me they’d obviously align fairly well with my outlook, you should not let them cloud/colour your (non)analysis of this announcement.
The Tories bad, Labour good mantras, and their reverse, are at best overgeneralisations and sometime mischaracterisations. Opinions differ. But in a democracy your opinion is no more important than anyone else’s different opinion. And if your opinion didn’t garner sufficient votes, then tough! And it is tough when you know you are right! But that’s democracy. Or don’t you believe in democratic politics?
Do you have a source for your more food banks than UK banks statement? In 2021 there were an estimated 6500 UK bank branches (but they are a technology-driven dying breed anyway), and the estimated number of food banks was about 2200 in 2019 (when there were more unclosed bank branches), so that really would be a false analogy. What the Iceland boss said (in 2019) was that there were more food banks than MacDonalds outlets. Some might disingenuously consider that not a bad thing.
Austerity was effectively inherited from a Labour government in 2010; remember when Liam Byrne, the outgoing Treasury secretary, left that slightly tongue-in-cheek note saying, “I’m afraid there is no money”. And let me remind you that Ed Balls committed Labour to basically following the coalition’s total spending plans in 2015. The magnitude of cuts would have been the same through 2015 to 2016 at least, with some small shifts in where the cuts would have fallen if Labour had got in. That it likely went on a year or two too long is a point most would likely agree with, and that is down to Tory chancellors.
As to “party gate”. Though it is certainly hypocritical and very annoying, it is no way corrupt. And remember that quite a few Tories have called Boris out on this.
Apart from the “Boris liar” point, each of your other points also has legitimate rejoinders, but life really is too short.
The only time a Tory minister tells the truth is when they say a fellow Tory minister is lying !!
More drivel from you lot
Great news!
It depends. There appears to be sufficient investors queuing up. The problem currently is resource and equipment.
The Government can’t/shouldn’t give this investor preferential treatment otherwise they would be undermining the Altnet backers. In addition as MJ highlights the mimited Government target looks achievable without it.
The only benefit would be improving the investment to the smaller companies wishing to bid as local suppliers to BDUK.
Investors aren’t lining up to invest in about 15% of the country, hence the subsidies.
None of this money, other than perhaps a vanishingly small amount of collateral upgrade, should be going anywhere a commercial business plans to build.
This is utterly brain dead. Are they basically saying that Macquarie can get cheaper money than the UK GOVERNMENT? Seems to me like we could just use Govt money for this.
The question is how Macquarie are going to expect to get a return on this investment.
If they’re just lending money, it doesn’t make sense as you say.
If they’re buying something, then what exactly is being offered for sale?
Money makes money but you mitigate the risk of losing any as much as possible. If these businesses fail they will seek a refinancing deal. The debt holder gets an equity position in exchange for the cancellation of the debt. In some cases this dilutes current shareholders equity so much they are left with 1-2% of the value they had before. Sometimes that’s the only way for a business like Macquarie to recover its investment. At some point a business that makes money and delivers something of value is born. That’s the idea I think.