Welsh Government and Openreach Extend FTTP Broadband Rollout

The Welsh Government has issued an easy to miss statement on Digital Connectivity in Wales, which among other things reveals that their £52.5m Fibre-to-the-Premises (FTTP) broadband rollout contract with Openreach (BT) is now expected to cover slightly more premises. But this will push completion back to 31st March 2023.

The original contract consisted of two stages, the first one was a £22.5m deal (original target of 26,000 premises by March 2021 – later reduced to 20k due to the positive impact of commercial builds – here), while the second stage was a £30m extension (13,000 premises by June 2022). The reason why the second extension was more expensive, yet doesn’t go as far, is because the cost of build rises disproportionately in remote areas.

Last month we reported (here) that this contract had so far helped to extend Openreach’s full fibre network to a total of 29,959 premises (up from 25,855 in Dec 2021 and 24,515 in Sept 2021), but the latest update notes that the rollout will now run until 31st March 2023. However, it may be wrong to categorise this purely as a delay, because the WG and Openreach now expect to benefit more than the originally contracted number of premises.

Julie James, Welsh Minister for Climate Change, said:

“Our full-fibre roll-out with Openreach has been deploying gigabit capable broadband to homes and business over the last three years against a difficult backdrop of the pandemic and other challenges including securing agreement from landlords and landowners to deploy fibre on land and in buildings. To the end of March 2022, the project has delivered access to gigabit capable broadband to 29,959 premises that were included in the agreed roll-out. In addition to this, a further 4,382 premises have been addressed as a direct consequence of public funded roll out despite not being targeted by the project. The Welsh Government does not fund these consequential premises and so we warmly welcome their completion.

Given the challenges faced by the project we have now reached agreement with Openreach to extend the project to 31 March 2023 to ensure that as many premises as possible are able to benefit. The number of premises to be built to under the agreed roll-out is 37,137. While this is slightly lower than the anticipated 39,000 total premises, we recognise that a significant number of the premises de-scoped had already been given access to gigabit broadband under commercially led rollouts. In addition, we acknowledge that some premises had to be de-scoped where actual costs exceeded the modelled costs that Openreach had originally anticipated, and so could not be justified from a value for money perspective.

As with the rollout to date, we are very confident that the total number of premises to benefit from the project will actually be higher than 39,000 premises when the roll out closes in March 2023 through additional non-contracted, consequential premises providing additional benefit at no additional cost to the taxpayer. We currently anticipate that the total number of premises given access to gigabit broadband through this project is likely to be circa 40,000 premises.

Finally, I want to provide a brief update on the Access Broadband Cymru grant [voucher] scheme. Following a recommendation by the National Infrastructure Commission for Wales following its work on digital infrastructure issues, we have conducted a review of the scheme. The review highlighted a number of recommendations which my officials are working through, and I hope to be able to say more shortly. However, one important change to the way the scheme operates will be implemented in the coming weeks. Applicants will soon be able to fill-out all of their details through an online application process rather than having to fill out an application form and then email it to the team. The new application process will make it easier and quicker to apply. I will update Members once the process is live.”

It’s worth noting that tens of thousands of premises are still expected to remain poorly served at the end of this contract, which may yet shrink as a result of commercial builds (e.g. Openreach and Ogi are going deeper). Some others will hopefully be tackled by the gigabit voucher scheme and community fund, but the bulk may have to wait for the £5bn Project Gigabit programme (Welsh Plan) to slowly work its way toward deployment.