CityFibre’s UK Full Fibre Rollout in Norwich Faces Possible Pause
A district councillor has claimed that CityFibre’s £50m project to deploy a new 10Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP network across the Norfolk city of Norwich, which began in September 2021 and was being supported by civil engineering contractor Telec Networks, could be at risk of a protracted suspension.
The new network, which was originally expected to cover almost 100,000 premises (“almost every home and business in the city“), has already gone live across a large chunk of the city – from Taverham and down to New Catton in the centre. A significant amount of build activity is also taking place in other locations across the northern half of the city.
The work forms part of the operator’s wider ambition 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). CityFibre has so far passed 2.9 million homes (up from 2.6m in late March 2023), but only 2.5 million of those are currently considered to be fully Ready for Service by an ISP (up from 2.3m).
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However, concerns about the future of the build were raised after a local district councillor – writing on a private Facebook group (seen by ISPreview) – published details of an email they’d received from Norfolk County Council (NCC), which alleged that the operator might end up “pausing works in Norwich for 18 months whilst they assess if it is financially viable to continue.”
The councillor claimed that CityFibre had “suddenly let Telec go and are no longer associated with them,” although the exact situation has not yet been confirmed and appeared to be subject to an imminent meeting between NCC and CityFibre (if it occurs, the operator will hunt for a new contractor). At the time of writing, we have not yet had a response from Telec, but CityFibre informed us last night that they were still in discussions with their contractor.
A CityFibre spokesperson told ISPreview:
“Given the pace and scale of our nationwide rollout, we continually review the prioritisation of our deployment locations, considering a range of factors. We are currently in discussion with our build partner in Norwich about progressing our rollout.
Our nationwide rollout is progressing well towards our 8 million premises target, we are an integral delivery partner to government for rural connectivity as part of Project Gigabit, and we remain confident in our delivery of one million Ready For Service homes to our customers this year.”
CityFibre informed us that some of the factors they consider when reviewing their individual deployments include local competition (i.e. how many rivals are there in the same space), the level of support from local authorities and deployment costs. We note that Openreach and Virgin Media both have significant gigabit-capable networks in the city, which is fairly normal, and Upp is also building a little FTTP. Both Hyperoptic and OFNL also have a tiny patch of coverage, but are not actively building much.
So far as we can tell, a final decision on the operator’s contract with Telec has not yet been formally taken, but experience suggests that any ending of the relationship may result in a protracted pause of the local rollout while CityFibre hunts for a replacement. Such pauses typically seem to last for anything from around 6 to 12 months+, thus the suggestion of an 18-month pause may be more about managing expectations (i.e. worst case).
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On the other hand, it is well known that CityFibre is under growing financial pressure (here) – not unlike the rest of the industry – and they’ve already had to cut a significant number of jobs (here). Earlier this year it was similarly reported that VMO2 / Nexfibre (Virgin Media and O2) had held “initial talks” over the possibility of mounting a £3bn takeover bid for the operator (here).
At the same time CityFibre recently said that they remain “confident in our plan” and, despite seemingly being a potential consolidation target themselves, they are also looking to grow their coverage through further acquisitions or partnerships (apparently, they have an interest in up to 20 potential altnets). But short of a major development, that 8 million premises target for 2025 is already starting to look overly optimistic.
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, BlueSky, Threads.net and Linkedin.
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They’ve made an absolute mess in some areas, always in the local press.
My Parents home in NR4 had the streets dug up nearly 2 years ago, and there hasn’t been a go live since.
Rubbish. I haven’t seen a single EDP article about CityFibre making a mess.
If they’re doing a shoddy job CF will be on the hook for any fines and bad press etc. from the work. If the subcontractor aren’t up to standard it would make sense to swap them out.
The rest of the comments are all very doom and gloom (Like no overlap with VMO2 in prep for a purchase), But I think this is the most sensible reason.
@Matt… Sounds like they’re planning to pause for 18 months, don’t think it would take 18 months to find another contractor.
It’s clear they’re just slowing their build to slow the spending.
@mike
https://www.eveningnews24.co.uk/news/local-council/22611255.revealed-much-county-council-fined-cityfibre-work-city/
https://www.eveningnews24.co.uk/news/local-council/22316514.cityfibre-fined-council-shoddy-work-suburb/
https://www.eveningnews24.co.uk/news/housing/22322257.city-folk-baffled-barricaded-homes/
https://www.eveningnews24.co.uk/news/business/22321111.cityfibre-anger-drills-can-heard-hellesdon-10-30pm/
https://www.eveningnews24.co.uk/news/housing/22318722.bodged-tarmac-left-mystery-workmen-leaves-suburb-fuming/
@mike
I’ve just posted (but pending moderation, 5 articles in the norwich evening news).
@Mike – Just have a look at Cityfibre’s Facebook page, the comments are just a long list of complaints from extremely unhappy residents.
It’s really quite embarrassing, it’s a wonder Cityfibre don’t shutdown their Facebook page.
@kim I can only find one bodge job in the Evening News, the rest are NIMBYs moaning like usual about the necessary and unavoidable construction works
@Jeff – no look at other areas where the contractor went bust. (or the article) – it took CF easily 12 months to replace the contractor and then they have to “get going” and break ground – and then they have to ramp up. Especially if its the first time this subbie will be doing work for CF.
@Mike – Unfortunately those ‘NIMBYs’ that they’re upsetting are the very people they need to get signed up, so one day they might be able to make a profit.
@mike I don’t call complaining about drilling in the street in a residential area at 10.30 at night NIMBYism. Unless it is essential emergency works that is simply unacceptable.
NIMBYism is generally things like a train line, improved road or a phone tower which would help others in the surrounding area. Digging up the road for faster internet only improves the people who live on said road.
Cityfibre restorations are often not in the best condition, recent works in Leamington are average at best.
I guess they’re finally realising that overbuilding is not viable.
Overbuilding is viable.
Overbuilding at £900-£1100 per premises passed… not so much.
Why is it costing Cityfibre so much more per premises passed compared to other builders?
Makehappen were the contractor working on behalf of CityFibre in my local area, and I was surprised to read that they’d gone bust. Is it possible that CityFibre are squeezing their contractors to keep costs down, and dropping them if the contractor doesn’t comply?
On my road they microtrenched half the road, and told my neighbour that the properties further along would be served via Openreach duct and poles. The houses served by microduct, have small boxes installed into the tarmac at the bottom of the gardens, but the properties in question have large gardens and driveways to the front, and it isn’t immediately obvious how they’ll connect from the road to the property; The properties in question are currently served from overhead cabling on poles, from the road at the rear of the properties. My road is probably an exception and other roads may make more sense, but it highlights how feeding properties via poles and overhead cable is far easier and more maintainable than underground connection.
I know at least one installer will dig a tunnel. Moling is amazing technology. If they have moling equipment, it’s super easy and fast.
Otherwise, less nice, I suppose they dig a trench, or lay a visible cable.
Cityfibre is burning cash at a horrendous rate, their debt is piling up and interest rates have increased.
Sounds like they’re putting the brakes on to try and get a grip on their spending. Maybe wait for take-up rates to improve before they spend even more money.
Clearly slowing things down. I wouldn’t be surprised if they announced more redundancies shortly or ‘restructuring’ as they call it.
Obviously Cityfibre is taking steps to slow down their spending, maybe their owners/investors are getting twitchy.
I realise they’re still in the investment phase, but how long are they going to keep pumping money in if there’s nothing coming out the other end?
Suddenly Cityfibre don’t want to overbuild where VMO2 already have fibre.
Very interesting, is VMO2/Nexfibre’s purchase of Cityfibre going ahead?
How can Cityfibre say “we’re confident in our plan” when they’re putting builds on hold and obviously aren’t going to achieve their planned target of 8 million premises by the end of 2025?
There is a saying in Silicon Valley “Fake it till you make it”. Companies rarely admit to being in trouble pretty much up to the day they call the administrators in. They just continue with the bombast till the last minute to try and keep the show on the road.
Please don’t be true. I need them to save me from Virgin Media
Not looking good… Dropping contractors, next they’ll be dropping more employees.
This isn’t the first time. They’ve dropped subbies before for poor quality work.
Some examples:
https://www.ispreview.co.uk/index.php/2021/07/cityfibre-experiences-contractor-woes-in-derby-and-eastbourne.html
https://www.ispreview.co.uk/index.php/2022/12/cityfibre-uk-restart-fttp-rollout-in-chester-with-new-contractor.html
https://www.ispreview.co.uk/index.php/2022/06/cityfibre-start-halifax-fttp-broadband-build-with-new-contractor.html
https://www.ispreview.co.uk/index.php/2021/10/reading-uk-councillor-threatens-to-remove-cityfibre-contractor.html
Some of these are from 2021 – which was a huge push from CF. Not everything is about CF being in an high-debt position. VM02 are also in a high debt position but no one talks about them not being profit making:
https://news.virginmediao2.co.uk/wp-content/uploads/2023/05/VMO2-IFRS-Quarterly-Report-Q1-2023-Final.pdf
Check out their debt pile (point 5). A good chunk of that I suspect is what they still owe UK Gov Plc. from NTL / Telewest rollouts.
This site seems to make everything doom and gloom for CF. Their network seems solid, they do have their issues (business processes, like swapping ISPs) but generally they look in a pretty strong position as a wholesaler. I suspect CF doing so well is what started VMO2 looking at doing this their own way anyway (And I think they thought they were being crafty, starting a new network under a new company to not hit obligations BT has to – but OFCOM publicly stated they were wise to that)
VMO2 don’t owe HMG anything, Matt?
While we’re at it CityFibre in a strong position? Their build is running at roughly double the planned cost per premises passed, is behind schedule and their build plans in the short-ish term have been significantly scaled back.
Nearly a grand per premises passed is not conducive to success in a market where both the incumbent and smaller altnets are building for a third of that.
They are a really long way away from where they thought they’d be. They were hoping to have Sky on their network and ended up being used by Sky as leverage to get better pricing from Openreach.
Why is it costing Cityfibre so much more per premises passed, compared to their competitors?
It’s it simply because their overheads are too high, too many highly paid executives?
Investors putting the brakes on, they’ve got to get the finances under control otherwise they’ll pull the plug completely.
They are not connecting people, that’s the problem. We had our street ready for the past 2 years and they still aren’t allowing us to join – it’s insane. Connect the street/neighborhood when it’s done. But they keep waiting for the whole UK to be done or smth, before they start connecting people…
That’s good. Put your wares in the shop window and not let people buy them. Don’t see that as much of a business plan.
@Big Dave
It’s worse than that!
Build this really big, flashy, expensive shop that’s costing millions, place your goods in the window but don’t allow people to buy them.
Then wonder why your not making profit and the debts are piling up.
There seems to be a trend here, City Fibre trying to claw as much money back as they can, sheer panic if you ask me. Stopping work on all of their builds. This seems to be more reactive than planned, and while Norwich is the hot topic for today I feel that there will be many more of their builds suffering the same way in the near future.
Why have so many contractors that are working for them folded or ended a contract? they can’t all be bad.
I think that more redundancies within City Fibre won’t be a surprise to anyone. Sadly, there will be many more casualties.
@Ex installation engineer
I agree completely, definitely a pattern emerging. Not good news for those involved directly or indirectly.
Sadly this will only get worse for City Fibre.
They have used some of the biggest names in the industry who have then pulled out after legal battles over payment issues, but managed to save their respective businesses, they have moved to T2 contractors, who embraced the dream, but a lot of those companies who were around for years and good names in the most part, were taken out due to cashflow issues, non payment, fines which led to insolvency events. Those contractors made significant investments in Y1 of those builds and never seen a return before collapse.
There are no T1, or T2 Contractors who want to work for City Fibre anymore as they know they would lose their respective businesses if they are indeed not multi-utility. The City Fibre plan was ill conceived by people who do not understand how to build a network and equally decided that NEC3 was a suitable form of contract to deliver the works. Even the T1 Contractors lost money with the commercial and legal strengths they had in house. I think it is so sad that the Directors and employees of those companies who have been taken out by City Fibre over the last 5 years, were left to carry the can for a network rollout that to this day has not improved on design, rollout, execution and delivery. Its sad to see that the same problems exist today that existed 4 years ago, no lessons learnt along the way.
Sub Contractors into the T1s and T2s have been respectively burnt, some of them on multiple occasions who will not receive a pound or penny of the monies they have worked so hard for.
Its about time the regulator and government looked more closely at City Fibre and their engagement with Contractors. Ironic that MakeHappen Group went into Administration a few weeks ago, circa 20% owned by City Fibre, even their FD was a MakeHappen Employee as the FD. Hopefully those creditors get something from this sad turn of events.
To build a network you need a plan, which in the current times, continues to change for various reasons, but if you cannot design a network, don’t set about building one.
The Telecom Construction Industry has been destroyed in the last 12 months and those Directors that wanted growth so much that were prepared to go for risk v reward with that entrepreneurial spirit, will mostly likely not re-enter the industry. Don’t blame the labour pool, yes there is bad ones out there, but in the most part everyone wants to do a good job and get paid on time. Cash Flow is king, it only takes one late payment or one non-payment based on some silly performance clause and your in trouble.
I hope this all changes, but if you kill the build chain, then nobody is running to build your network. Telec were always a small sub contractor like many others who tried City Fibre in the spirit of growing their businesses and creating jobs and growth. Its sad if they have pulled out and hopefully they can survive whatever may lay ahead for them.
I have always said, wait for the street EV charging build to come along, then watch how many of these 7/3mm silly purple tubes get ripped out and ripped up causing no end of broadband disconnections for local residents, the worst is still to come.
@Don’t take the risk on this one
Thanks, very interesting. Food for thought.
@Don’t take the risk on this one –
I wasn’t aware of the link between Cityfibre and MakeHappen Group, that was kept quiet!
Very interesting.
@john When City Fibre acquired Fibre Nation a few years ago, Fibre Nation had a stake in MakeHappen Group in order to have a dedicated build partner and build resource, therefore by default on the acquisition of FN by CF, CF owned the same % of MHG. If you look at Companies House one of the CF Directors resigned from MHG a few weeks before they called in the administrators. That Director was put on the board of MHG as FD in October 2020. Therefore assuming by default that the creditors would be able to recover some losses, it was public knowledge at the time.
Cityfibre were the biggest share holder/owners of MakeHappen.
MakeHappen were working on behalf of Cityfibre in this fantastic fibreoptic gold rush.
Yet MakeHappen still went under.
Just doesn’t feel right.
If TELEC have left the build it will remain to be seen if they pulled out of the build or were pushed !
Maybe City Fibre needed them to leave so they could stop building, save money and save face ? Maybe TELEC have their own reasons ?
What about City Fibre’s project gigabit, who will be left to do that?
I get the distinct feeling there’s a big shift happening behind the scenes at Cityfibre.
There’s an immense amount of money riding on them.
Just waiting for a major announcement any day now.
I think the comments of is there a pattern? is City Fibre trying to save face and money? Are they really running a controlled planned approach to this?
Well the pattern is emerging and I would expect to see more posts like this as Kier, who have many builds with City Fibre, have also been stopped in all of their build areas. Sadly a few of my old colleagues will now also be losing their jobs.
I wonder how many more stories like this are going to come out in the near future?
It seems like a very aggressive hard stop from City Fibre.
Last time it was posted on this site CityFibre had a take up rate of about 8%. It was also recently reported that Openreach had achieved 33% take up on its builds despite the fact its wholesale rate is apparently higher than CF. It seems to me that part of the problem is that the customer has been left behind in all of this. BT is the biggest retail ISP in this country and I don’t think it’s because they are spectacularly better than any one else rather than in reality it’s that the average consumer is somewhat Conservative (small c) and more likely to go with what they know. This seems to have been forgotten about by the altnets.
Some of the Altnets got it into their mind that Openreach + VMO2 + 2 altnets would be fine as each would get 25% of the market rather than Openreach + VMO2 get the lion’s share and the altnets are fighting over the remaining at max 20% between them.
A few years ago the model was to build where only ADSL was available or in richer areas where only VDSL was available. For the former you’d get significant market share for being the only good option and the later you could charge premium prices for premium speeds.
Since Openreach started deploying it changed to undercutting Openreach’s pricing or beating them to deployment. The later many seem to struggle on with deploying fibre cables and making themselves known to the locals… and then taking months or years to allow orders.
Based on Virgin Media’s 37% take-up from a couple of years ago before much FTTP competition, I’d estimate the desire for faster-than-FTTC broadband to be about 40% of the total market. This would mean that OR FTTP plus VM would have already saturated the market and leave no room for any altnets.
If you look at the current figured the big 3 (BT/Sky/Virgin) currently have 20 million customers between them. Bear in mind there are only 31 million premises in the country everyone else is likely to be fighting for scraps and I don’t see that situation changing to any great degree.
Is Cityfibre just dumping their contractor or are they in crisis financially and need to stop spending money?
Sadly I think it’s the latter and if so then we’ll be seeing more redundancies.
Build is indeed being slimmed down just now, purse strings won’t be pulled until operational breakeven is achieved.
I don’t think in this case its the contractors fault, every CF contractor have little to no work just now except approved areas within the franchise.
I guess you mean the opposite really?
The purse strings will remain pulled until operational breakeven is achieved.
Yeah that was terribly worded… but you got it.
@Insider
Is it true that Cityfibre’s cut backs will also include another round of redundancies?
From what I hear most likely, some areas all fully built and handed over.
They are focusing more on winning bduk contracts and cities near completion are slowly being scaled back. I think they are seeing the light with over build and revising build plans. Who knows might reach 8m properties but not by the original plans
My colleague handed her notice in recently, fingers crossed I’ll be on my way soon too.
Can’t bear another round of ‘guess who’s on the at risk list’ while the management watch us squirm.
Makes you wonder what all the ISP’s who signed up with CityFibre (Zen, Vodafone etc – I would say Talk Talk but they have their own problems) think about all this. Hope they’ve got a backup plan.
@Big Dave…
Also makes you wonder what the investors are thinking, after been told the company they’re buying into was going to cover 8 million premises.
Now they’re at just 2.5m and it’s grinding to a halt.
Good job then that the UK’s biggest FTTP wholesale provider is their other supplier and will not be giving up so early. 11m premises ready to order today (32% have too), 6.2m more in various stages of build and realistic plans to go for 25m with funding to do so.
Those figures are enough to make the CityFibre investors weep into their champagne.
According to the last figures I saw, Cityfibre had a take-up percentage of only 7.9%.
With take-up so low no wonder they’re slowing up their build, it’s simply not viable.
Surely they can’t carry on like this, something’s got to give.
The 7.9% is now in double figures now, only just. Need about another 100k customers before the staff costs pay for themselves apparently.
To many alt nets chasing to little business. There is now considerable overbuild further reducing there likely take up. Higher interest rates mean a high cost of servicing the debt. The response at present is to slow the build rate but whilst that reduces the rate at which they are burning through cash it does not improve revenues
It does not help that some Alt Nets do not provide a landline. Yes you can use another provider but that’s hassle and you have the number porting issue
WE will almost certainty more Alt Nets go bust or get taken over. It was a crazy way to deploy fibre but e are where we are now
With 53% have access to FTTP the overbuild issue can only get worse. There is simply not enough room in the market for all these players
The Cityfibre rollout in the streets around me seems to have stopped. It’s looked exactly the same for 10 days now. No progress. The exact same purple tubes sticking out the ground in the same places. The exact same unfinished holes in the ground.
Don’t hold your breath. Swish fibre laid a duct in our street, ran a cable between 2 poles. That was in January. We haven’t seen them in the street since.
Update: This afternoon I saw Pod-Trak Networks in Norwich working on a site that Telec had been working on previously but hadn’t touched for well over a week.
Could CityFibre have changed contractor this quickly?
They have worked for CF before. Maybe they’ve been brought in to make good any existing streetworks?
Let’s hope Podtrak got their payment up front or in writing, sounds like no one is safe at the moment. What is the criteria of not getting removed from the City Fibre build, does anyone know that enough to feel safe?
Cityfibre have done well to avoid the public eye so far, they are a company with real issues.
Recent restructure, builds slowing down.
They have also just announced that their main build partner Kier are exiting which who are building 5 Cities in the south west.
I’ve been led to believe that Oakway for Plymouth are also being removed so seems like a balancing of books and removing overpriced BPs in prep for a sale.
Gregg and his executive team of salesman can’t sell a fake dream forever before somebody checks the maths.
I’ve heard talk of more redundancies on the way too.
Obviously something’s changed.
@Billy S;
I’m afraid it’s crunch time for Cityfibre.
Aiming for 8m premises by 2025 but now stopping building at 2.5m, it’s clearly not a company that’s moving forward.
Huge debt compounded by rising interest rates and inflation, overbuilding, aggressive competition, high cost of each premises passed and a take-up rate of barely 10%, you don’t have to look very hard at the maths to see things aren’t adding up.
Owners/investors start asking questions, putting pressure on Mr Mesch and his team who promised so much.
It looks like the gravy train is grinding to a halt.
In my area of Taverham they have been here since early 2023 digging up paths and installing cabinets. Two of my neighbours have had the installation to the house. I have had FTTP since September 2022 supplied by Openreach.