BDUK Start Procurement on Cross Regional UK Gigabit Broadband Rollout

The Government’s Building Digital UK agency has started the procurement phase for the award of their first major Cross-Regional Supplier Framework (Type C) contract under the £5bn rural Project Gigabit broadband rollout scheme, which could see a single network operator being picked to help cover some of the most challenging areas.

Currently, over 76% of UK premises can already access a gigabit-capable network (details), which falls to 53% when just looking at FTTP (i.e. the gigabit figure is boosted by Virgin Media’s HFC upgrade – here). But Ofcom currently forecasts gigabit coverage to hit 92% by March 2025 (here), with purely commercial deployments alone being expected to deliver over 80% of that.

Project Gigabit is thus intended to help tackle that final 20% (F20) of the UK and, more broadly, aims to help extend networks capable of delivering “gigabit” (1000Mbps) download speeds (and uploads of 200Mbps+) to “at least” 85% of UK premises by the end of 2025, and then “nationwide” coverage (c.99%) by around 2030 (here).

Most of the funding from this project has been allocated to their Gigabit Infrastructure Subsidy (GIS) programme (currently £1.4bn and rising), which normally sees network operators (ISPs etc.) bidding through a new Dynamic Purchasing System (DPS) to extend their gigabit broadband networks across disadvantaged parts of the UK. Until now, this has been reflected by a mix of smaller (Local) and larger (Regional) deployment contracts (Type A/B).

However, the newer Cross-Regional (Type C) contracts are a bit of a different animal. The idea of this is to appoint a single supplier to target premises (i.e. subsidise the design, build and operation of a new gigabit network) in areas where no or no appropriate market interest has been expressed before to BDUK, or areas that have been de-scoped or terminated from a prior plan.

Such areas are often skipped due to being too expensive (difficult) for other, often smaller, suppliers to tackle. The good news is that BDUK formally launched the first procurements for Type C contracts on 27th July 2023 and at present there are two such contracts being offered.

The Current Type C Procurements

➤ Call-Off 1

This covers 57,500 premises across parts of Lancashire, North Wiltshire and South Gloucestershire, West and Mid-Surrey, Staffordshire, West Berkshire and Hertfordshire. The total value of the allocated public investment is £149.7 million (i.e. a subsidy of £2,603 per premises).

➤ Call-Off 2

This covers 47,700 premises across parts of West and North Devon, North West and Mid Wales and South East Wales. The total value of the allocated public investment is £139.7 million (i.e. a subsidy of £2,928 per premises).

The catch with a “single supplier framework” is that there may only be very few operators that could tackle such a large commitment, which would tend to favour the likes of Openreach (BT), nexfibre (Virgin Media) and CityFibre, and not everybody is happy about that (here).

On the other hand, if there are no other viable alternatives left at-scale, then the Type C approach may be the only option left for some areas. Voucher schemes are good for filling in some of the same gaps, but most of the individual voucher projects are also small and slow to deliver, which could make hitting that “nationwide” aspiration more difficult if that were left as the only alternative to Type A/B.

Otherwise, the new procurements will be open for interest until 27th August 2023 and, assuming all goes well, then the first of the Cross-Regional Supplier Framework contracts could be awarded by around June 2024.