Neos is Preferred Bidder for Network Rail’s Trackside Fibre Cables

Network operator Neos Networks has today been named as the preferred bidder for Network Rail’s Project Reach, which among other things could see them invest in the design and build of a new trackside fibre optic communications network. This could also help to improve UK gigabit broadband and 5G mobile coverage.

Just to recap. We reported last year that both Neos Networks (bidding alongside Cellnex) and Virgin Media (bidding alongside Nokia and Jacobs) had been approved to bid on the £1bn (estimated) auction of 16,000 km (10,000 miles) worth of Network Rail’s trackside cable network.

The privatisation plan, which among other things would see the winning bidder upgrade the trackside infrastructure and build 250 new mobile masts to help tackle 5G “notspots” for commuters, was first revealed by Network Rail in 2021 (here). The sale itself reflects their older trackside cable network, much of which this still runs off legacy copper lines and is in need of an upgrade (this carries all sorts of transport, CCTV, signalling and other data).

The aim of this auction was thus to both upgrade that old infrastructure (probably with NR retaining some preferential access to the new network for their own services) – delivering improved performance, safety and connectivity benefits for both NR and their passengers – and raise money to help pay down their debts (plus cutting costs).

Project Reach Update

As above, Neos has today confirmed that they’ve been named as the preferred bidder for Network Rail’s Project Reach and have thus entered into exclusive discussions to be a key player in the project. Being a preferred bidder does not yet mean that they’ve won the auction, but it is usually a very strong indication that they probably will (we rarely see rejections of a preferred bidder).

Neos owns one of the fastest growing, high capacity business fibre networks in the UK, spanning 34,000km and 550 exchanges. Suffice to say that they’re well placed to deliver the new fibre network for Network Rail. Neos will also work in partnership with a tower (mast) company looking to leverage its 4G and 5G network infrastructure. The company isn’t named in their announcement, but last year we understood it to be Cellnex UK.

Colin Sempill, CEO at Neos Networks, said:

“This new network will deliver a step-change in connectivity and available capacity, which, in turn will help to transform UK rail for the passengers and neighbouring communities it serves. We look forward to working with Network Rail to finalise the contract and start mobilising this project which will see the creation of numerous jobs in different geographies.

This is critical for us as we continue to support UK businesses and service providers with the high capacity connectivity services essential for innovation and help deliver on the government’s plans to improve the availability of high-quality broadband across the UK.”

Harriet Hepburn, Network Rail’s Corporate Finance Director, said:

“This is an exciting opportunity for NR, and we are excited at the prospect of entering this long-term partnership. The proposal provides a comprehensive package that will deliver real benefits for passengers and the railway, and also significant savings for the UK taxpayer.”

Aside from the obvious benefits to Network Rail itself and their passengers, the announcement claims that the new network “will also create opportunities to advance the rollout of Fibre-to-the-Premise [FTTP] connectivity across Britain, improving infrastructure access for alternative network providers, while bridging the UK’s digital divide and rural connectivity conundrum.”

The catch is that this rail network tends to follow a very specific path and largely passes through areas that are already well served by a variety of other broadband and communications providers. In other words, this isn’t going to be some magic fix for the country’s remaining connectivity woes.

However, it will certainly help to support some digital infrastructure deployments, such as the Government’s own £5bn Project Gigabit broadband rollout (nationwide gigabit coverage by around 2030) and the wider industry-led £1bn Shared Rural Network (SRN) project. The latter aims to extend UK geographic 4G mobile coverage to 95% by the end of 2025. Not to mention the commercial rollout of 5G networks.

Lest we forget that, back in December 2017, the UK Government also pledged to make “uninterrupted” WiFi and Mobile (5G) broadband speeds of up to 1Gbps (Gigabits per second) available on-board all UK mainline train routes by 2025. But we haven’t heard the Government talking about this target for a long time (here).