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CityFibre Win Rural Cambridgeshire Gigabit Broadband Rollout Contract UPDATE

Tuesday, Mar 21st, 2023 (6:50 am) - Score 3,416
CityFibre-Engineer-Holding-Optical-Fibres

The sixth contract awarded under the UK Government’s £5bn Project Gigabit broadband rollout scheme – worth £122 million – has today been awarded to CityFibre, which will upgrade connectivity for “around” 45,000 hard-to-reach homes and businesses across rural parts of Cambridgeshire in England.

At present CityFibre is best known for deploying across urban areas and aims to cover up to 8 million UK premises (funded by c.£2.4bn in equity and c.£4.9bn debt) – across over 285 cities, towns and villages (c.30% of the UK) – by the end of 2025 (here). The operator has so far built to a total of 2.5 million premises (passing 22,000 per week), but they have also conducted some limited deployments in a few rural communities (example).

NOTE: Around 73.5% of UK premises can already access a gigabit network (c. 45% via just FTTP) – see here.

By comparison, Project Gigabit aims to extend 1Gbps capable (download) networks to reach at least 85% of UK premises by the end of 2025, before hopefully achieving “nationwide” coverage (c. 99%) by around 2030 (here). Commercial investment is expected to deliver around 80% of this, which leaves the government’s scheme to focus on tackling the final 20% (mostly rural and some sub-urban areas), where the private sector alone often fails. The project is technology neutral, so it can be delivered via either “full fibreFTTP, Hybrid Fibre Coax (HFC) or fixed wireless access (e.g. 5G), but FTTP is favoured.

The project uses a number of different approaches to tackle this challenge (e.g. vouches and investment in dark fibre builds), but the largest part of the scheme involves a gap-funded subsidy approach – the Gigabit Infrastructure Subsidy (GIS). This is where smaller local and larger regional contracts are awarded to network operators and ISPs who can help to build their gigabit-capable infrastructure across the final 20%.

The Building Digital UK (BDUK) agency, which manages Project Gigabit, has already awarded a string of initial contracts to various ISPs (see bottom of article for a summary) and the sixth one – Cambridgeshire and adjacent areas (Lot 5) – has today gone to CityFibre. The deal is funded by £69m of public investment, which will in turn unlock a further £53m of commercial funding to help reach around 45,000 premises in the county.

Detailed planning in Cambridgeshire is said to have “already begun” and the first Project Gigabit connections are expected in early 2024. The rollout itself will benefit villages and hamlets “around” Ely, Newmarket, Royston, Huntingdon and many other areas (some of those locations are already well served by gigabit broadband, hence the use of “around” – focusing on the poorly served outer communities).

Julia Lopez, Digital Infrastructure Minister, said:

“Thanks to our record-breaking roll out Project Gigabit, rural homes and businesses across Cambridgeshire can be confident they won’t be left behind in the upgrade to top-of-the-range gigabit broadband.

This landmark deal with CityFibre will help deliver the Prime Minister’s priority to grow the economy by ensuring the county’s pioneering science and tech industries can unleash their full potential with lightning-quick connectivity, whether in the city or the countryside.”

CityFibre has also committed an additional £300,000 local stimulus package to create local jobs and provide training – including construction and engineering internships for disadvantaged groups. The package will also provide free connectivity to 50 local charities and social enterprises and help those who have trouble using digital technology.

Greg Mesch, CityFibre CEO, said:

“Having already rolled out full fibre to 2.5 million homes in towns and cities across the country, we know just how important it is that rural communities and internet service providers are freed of their dependency on creaking copper networks and finally able to enjoy the benefits of fast and reliable digital connectivity.

That’s why we are delighted that CityFibre has been selected by the government as a partner in its Project Gigabit Programme. We look forward to a long and effective partnership in this exciting programme which supports not only rural connectivity, but a healthy competitive market for the long term, benefiting consumers and business nationwide.”

The network operator already has good coverage in Cambridgeshire, where it has so far committed more than £100m of private investment, completing deployments in Peterborough and March, and with builds well underway in other locations across the county. Nevertheless, CityFibre scooping their first major Project Gigabit contract is big news, not least because they’ve done it before Nexfibre (VMO2) and BT (Openreach).

On the other hand, this does represent a challenge for an operator that has, until now, largely focused on conducting more cost-efficient urban builds. CityFibre’s limited rural footprint will give it some experience, but it remains to be seen how well they cope with doing such a project at scale.

A separate announcement from CityFibre today has also confirmed that this contract will see the operator make an additional commitment to connect a further 170,000 homes across Cambridgeshire as part of their commercial programme. Once all is completed, the operator hopes to serve more than 365,000 homes.

NOTE: Of the 215,000 homes now being addressed by this ‘Project Gigabit’ contract award (45,000) and CityFibre’s extended commercial rollout (170,000), 67% have no access to Virgin Media’s networks and 75% are excluded from BT Openreach’s announced FTTP rollout.

In terms of the service itself. CityFibre is supported by various ISPs such as Vodafone, TalkTalk, Zen Internet, Giganet, iDNET and many others.

Project Gigabit GIS Contract Awards History
Wessex Internet for North Dorset (Lot 14.01) in August 2022 (here)
➤ GoFibre for Teesdale (Lot 4.01) in September 2022 (here)
➤ GoFibre for North Northumberland (Lot 34.01) in October 2022 (here)
Fibrus for Cumbria (Lot 28) in November 2022 (here)
➤ Wildanet for Central Cornwall (Lot 32.03) and South West Cornwall (Lot 32.02) in January 2023 (here)
➤ CityFibre for Cambridgeshire (Lot 5) in March 2023 (here)

Project Gigabit is expected to announce further contract awards for areas including Hampshire, Shropshire, Norfolk and Suffolk by this summer 2023.

UPDATE 9:30am

Added some extra detail on CityFibre’s commercial build in the county, which wasn’t included in the Government’s own announcement.

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Mark-Jackson
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 X (Twitter), Mastodon, Facebook and .
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43 Responses
  1. Avatar photo James says:

    Greg says…

    “We look forward to a long and effective partnership in this exciting programme…”

    But yesterday we were told he was talking to Virgin’s Mike Fries regarding Virgin buying Cityfibre.

  2. Avatar photo ADSL Enjoyer says:

    As someone who is living in one of those areas marked for rollout, I’m a bit surprised that it’s Cityfibre given that there are other altnets fairly close by already deployed in other villages (gigaclear and county broadband to name a couple), but perhaps they don’t have the capacity to take on an entire BDUK contract. I don’t know what the incentives would be for them to continue deploying when they’re competing against a subsidized rollout. Also, the story about VM potentially taking over CF makes me wonder what the impact of that would be on the contract. Would VM be obligated to take on the BDUK contract?

    1. Avatar photo Andrew says:

      With Norfolk and Suffolk being announced very soon, it’s possible county thought the larger contracts there were more appealing. I know county have already begun rolling out widely in Suffolk.

  3. Avatar photo Jason says:

    Helps with their potential sell off to Virgin i suppose

  4. Avatar photo Robert H says:

    I’m afraid Mr Mesch and Cityfibre management have gone down in my estimation when I hear how they treat their staff.

    After announcing a large number of redundancies then leaving people in limbo for weeks/months, telling people their at risk of losing their job but giving no definite answer, causing uncertainty, stress and anxiety.

    It’s a very cruel and uncaring way to treat hard working people who’ve helped you build a business.

    1. Avatar photo Facts says:

      They are following the legally required 45 day consultation process as defined by the government and acas. They don’t have the option to do anything else.

    2. Mark-Jackson Mark Jackson says:

      This is the norm:

      https://www.gov.uk/redundancy-your-rights/consultation

      In the past, some businesses would just sack people straight away and cause a lot more harm. As stressful as it definitely is, at least this way you get some warning and can consider for yourself whether it’s better to ‘wait and see’ or actively hunt for a new job.

    3. Avatar photo Andrew G says:

      On the assumption that any payout is the same in both situations, the slow, formal processes cause more harm. I should know, the nature of my work means I’m always in the firing line (in all respects), and I’ve been made redundant a good few times. Worst by far were the companies dragging things out for months – it’s not “time to plan”, it’s months of miserable uncertainty and stress that grinds away your confidence and your energy, whilst offering false hope that maybe they’ll redeploy you, or appoint you to one of the smaller number of roles that remain. On the other hand, I was made redundant once on the basis of one meeting “we need to cut costs, your role is going, here’s a generous settlement, now off you go, no need to work notice”. That was fab – I understand why they were doing it, there was no doubt or uncertainty, I’d got a modest sum to ease the parting, and I could get on with landing the next role, feeling fully confident in my own abilities, as well as having no ill will to my former employer.

  5. Avatar photo Meadmodj says:

    I appreciate the difficulty for BDUK to accurately identifying the premises that should be included, the grouping of premises and the complexity of the procurement.

    However when I look at the OR and Cityfibre it is not clear that their criteria or logic is actually going to achieve the best outcome and the best use of public summary.

    * In Lot 5 there were over 14,000 premises identified as WHITE and they have apparently selected 45,000 of these.
    * A number of WHITE designated Postcodes (with WHITE in them) are actually in the middle of Cambridge which will have OR, VM and Cityfibre in adjacent streets.
    * As highlighted above many other Altnets and OR already have FTTP presence in some of the out lying villages.

    So it would be very useful and assuring if BDUK could publish the actual list of premises so that we have confidence in their process.

    I understood that Government funding was to assist those where commercial rollout is extremely unlikely to cover them, not those which are likely to be overbuilt or close the current/proposed commercial (within next two years) or where the cost of provision will continue to fall significantly.

    The average per premise appears to be £2711. I would have expected it to be higher if they were focusing on the true definition of WHITE.

    1. Avatar photo Meadmodj says:

      Public money not public summary

    2. Avatar photo Meadmodj says:

      Sorry 140,000 premises WHITE not 14,000

    3. Avatar photo Reality Bytes says:

      You know they did an OMR before allocating colours to the premises, right?

      Zero plans within the review period for any of the white premises to be built commercially.

      Given the £300-£700 per premises passed budget most of those building networks have for commercial build it’s quite a subsidy.

      Are you saying they should expedite the very most expensive to reach properties and leave a void in between where the last couple of percent consume all the money?

      They’re trying to reach as many eligible premises as quickly as possible. I imagine just as with the original BDUK subsidy per premises will increase as each wave is done.

    4. Avatar photo Will says:

      A total budget of £122m and 215,000 homes gives you a cost per premise cost £567 for this build, if you actually bother to read.

  6. Avatar photo Matthew says:

    Very very good news indeed

  7. Avatar photo Phil says:

    Waste of taxpayers money! Surely it can spend better improvements in NHS etc, hospital etc

    1. Avatar photo Andrew says:

      IMO the NHS needs reform rather than lots of extra money.

  8. Avatar photo Alex says:

    Mark – you say City Fibre has “beaten Openreach to the punch” on this. Did Openreach actually bid for the contract?

    1. Mark-Jackson Mark Jackson says:

      Beaten them to the punch on securing a regional Project Gigabit contract in general, rather than this specific deal.

  9. Avatar photo Anonymous says:

    Did Openreach even bid?!

    Bit of a surprise if so..

  10. Avatar photo Zed says:

    Cityfibre will fund £1,178 per prem, with project Gigabit paying up to £1,533. Still a hefty price and maybe explains why Virgin or OR have not yet won a contract.

    City will also need to share any poles, ducts or cabs they install. So others will be able to install more cheaply in the less remote areas. There is also clawback on the state aid if take-up is high in future years.

    Only time will tell if this was a good deal for City.

    1. Avatar photo Reality Bytes says:

      Not aware CityFibre will have to share the physical infrastructure, only that they have to sell open access wholesale products which they do anyway.

      Do you have a link to where the contracts require PIA?

    2. Avatar photo Zed says:

      Ts and Cs state that Gigabit funded networks needs to share any new ducts and poles with up to 2 further operators, but only if they cost >£50k and are >1km in length.

    3. Avatar photo Anonymous says:

      OR I don’t believe have actually bid for a single contract.. this alone speaks volumes.

    4. Avatar photo Art Fish says:

      Presumably OR looked at the white prems in both the last OMR and this OMR and thought they fell into the “too tricky/complex” bucket

  11. Avatar photo Pol says:

    You just know that this GIGABIT scheme is going to result in a shambles of a networks being constructed and contracts not being fulfilled cause of companies going bust and then it will be years of an enquiry.

    1. Mark-Jackson Mark Jackson says:

      I do fear that we may see a little of that, given the state of the AltNet sector. But time will tell.

  12. Avatar photo Backwater says:

    I live in Cambridgeshire. Can someone tell me where this mythical “Rural Cambridgeshire” is that people keep referring to as if it were a well defined geographic area?

    1. Mark-Jackson Mark Jackson says:

      Well, just to give an example, East Cambridgeshire seems to be classified (by Government) as almost 100% Rural.

      A public review of gigabit coverage also found that 91,369 premises across the whole county were not expected to get gigabit speeds within the next 3 years.

  13. Avatar photo Paul says:

    Has Greg Mesch/Cityfibre released any official statement regarding the talks with Virgin Media and possible sale of Cityfibre?

    1. Avatar photo Sarah H says:

      I was planning to sign a contract with my ISP for FTTP using the Cityfibre network, but I’m not so sure now.

      Like most people, my connection is extremely important to me, the last thing I want is disruption if the sale goes ahead.

      Maybe it’ll be safer just to stick with BT/Openreach?

    2. Avatar photo Ged says:

      Anyone one from Cityfibre here?

      Has there been any statement made regarding the sale of Cityfibre?

    3. Avatar photo Anon says:

      @ged – No, CityFibre isn’t for sale.

    4. Avatar photo Paul says:

      Anon said “No, CityFibre isn’t for sale.”

      Hasn’t anyone told you Mr Mesch is busy trying to sell it!

      Can the last person leaving please turn off the lights…

    5. Mark-Jackson Mark Jackson says:

      At this stage, it sounds more like Liberty Global (Nexfibre) approached CityFibre with a proposal, and that’s a very different context. Furthermore, I’m not aware of CityFibre making any of the usual moves and hirings that would normally precede a desire to sell or merge from within the company itself. But maybe the Telegraph knows something more, rather than just going off on a tangent.

    6. Avatar photo No smoke without fire says:

      Hmmm, I’m sure they weren’t just meeting to share a coffee.

    7. Avatar photo Anon says:

      @paul – Some of us might be closer to this that you think. Don’t just blindly believe what you read in the news.

    8. Avatar photo Paul says:

      @Anon If it’s not true then Cityfibre should have a word with the Telegraph and get them to retract the story, as it’s pretty damaging for Cityfibre.

    9. Avatar photo Holding On says:

      Based on the comments on here, we have a few CF employees

    10. Avatar photo Can't hear Greg denying it... says:

      Strange how we haven’t seen any statement from Mr Mesch denying the Telegraph’s claim that he’s in negotiations to sell Cityfibre?

  14. Avatar photo Gigabit gravy train shuddering halt says:

    Headline says…

    ‘Cityfibre’s surrender proves the gigabit gravy train has come shuddering to a halt’.

    I don’t understand, what have they surrendered to?

  15. Avatar photo Paula says:

    Excuse my ignorance, does this mean Cityfibre are giving up and throwing in the towel?

    How can they continue investing and working, trying to sell their service if everyone knows there trying to sell the business?

    Can anyone explain to me?

  16. Avatar photo Worried Cityfibre employee... says:

    @Anon By your comments I guess you work for Cityfibre at management level.

    Of course you want play down the possibility of Cityfibre been sold to Virgin Media, you don’t want CF employees getting nervous at the thought of losing their jobs.

    You’d rather try and pull the wool over our eyes, tell us there’s nothing to worry about, everything is fine and going to plan!

Comments are closed

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