AltNet ISP Grain Cuts Jobs and Slows UK FTTP Broadband Rollout UPDATE2
Alternative network operator and broadband ISP Grain (Grain Connect) has today become the latest UK builder of Fibre-to-the-Premises (FTTP) infrastructure to announce some job cuts and a “temporary” reduction in the level of their network expansion, which will continue until they’re able to secure more investment.
Grain has so far unveiled full fibre builds for over 50 locations across the country (plus 150 new build housing developments), which includes a lot of small to modest sized patches of various urban areas like Leicester, Liverpool, Accrington, Grimsby, Cleethorpes, Scarborough, Carlisle, Barrow-in-Furness, Hartlepool, Newport, Sunderland, Blackburn and so forth.
However, the operator has remained coy about their progress, although independent data from Thinkbroadband recently estimated that they’d covered around 70,000 premises (RFS). The real figure may be a bit higher than this, since TBB has to play catch-up as new areas go live (i.e. they’re often 2-3 months behind actual build)
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At the same time network operators – more broadly – are currently under a lot of strain, particularly from rising levels of competition (price and overbuild etc.), rising costs (e.g. leases, build, inflation) and the need to generate a good level of take-up in order to satisfy investors. Such pressures can make it harder to attract fresh funding, which has resulted in several operators slowing their build and cutting jobs as they re-focus on growing take-up. The same now seems to be true of Grain.
A spokesperson for Grain Connect said (News and Star):
“Raising capital at this time is taking longer than it did a year ago.
As a result, we have taken the decision to temporarily reduce the level of our network expansion, while we raise further capital to accelerate in 2024.
As a result, we are reducing around 20 roles across the country, with less than half of those in our Carlisle Headquarters.”
Despite the problems, Grain was keen to point out that “independent benchmarking shows our network deployment costs to be the lowest in the industry” (this was not substantiated) and they claim to be seeing “strong customer take-up” that is ahead of their business plan, albeit without confirming any figures. The operator added that the “foundations of the business” remain “strong“. Much will now depend upon whether the needed funding can indeed be secured in 2024.
Customers of the new service, once live, normally pay from just £19.99 per month for a symmetric 100Mbps package on an 18-month term, which goes up to just £34.99 for their top 900Mbps plan (take note that out-of-contract prices are £5 higher than this). All of these packages come with unlimited usage, free installation, a router and a pledge to ensure “no in-contract price rises.” The ISP also has a social tariff for those on benefits.
The ISP also has a promotion running that offers the first three months of service at just £5 per month across all packages.
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UPDATE 12:51pm
Grain has provided an additional comment, which also states that their network covers 150,000 premises (RFS).
A spokesperson for Grain said:
“Raising capital at this time is taking longer than it did a year ago. As a result, we have taken the decision to temporarily reduce the level of our network expansion, while we raise further capital to accelerate in 2024. As a result, we are reducing around 20 roles across the business.
We have around 150,000 homes ready for service across the country, with a rapidly growing customer base and customer take-up performing ahead of our business plan. Independent benchmarking also shows our network deployment costs to be the lowest in the industry, giving us a strong competitive position.
Grain is in a unique position in the Altnet market, in that it has already created a sustainable business model without the need for consolidation. This allows us to provide low prices to our customers, while also building a strong profitable business and we are on track to become the first Altnet to deliver positive EBITDA.”
The latest RFS estimate from Thinkbroadband is also now closer to 70,000, but they’re expecting to find more once they get a chance to focus on checking.
UPDATE 31st Oct 2023
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TBB has been busy running deeper coverage checks on Grain and they’ve now found about 95,000 RFS premises.
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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“Independent benchmarking also shows our network deployment costs to be the lowest in the industry” Not surprised with the contractors they hired around here – they left paths and roads a mess. Blocking driveways with no notice or not even laying out alternative routes for pedestrians in some cases and forcing you to use the road to walk down on busy roads (with my young son I might add!)
Common across many Altnets particularly those that have decided on their own duct work (all or part) increasing liabilities and reliability issues for themselves in the future.
As Meadmodj says that seams to be common with altnets. Certainly been true in Banbury with Swish Fibre and their contractor SF Stefan. They trenched our street to run a duct then decided they hadn’t done the tarmac properly so they came back and made a bigger mess second time around.
Expanding in lots of poor areas. Mmm. Can’t imagine take-up is strong.
No idea on take up and affluence but building in very tightly packed terraced streets.
I’m not sure how cherry picking the picked cherries to build to a few streets with the lowest possible per premises build cost in a far larger town or city will pan out but it’s what seems to be happening.
Can’t be cheap to build out the necessary infrastructure to serve an area for the sake of a small block of streets chosen because the properties were very densely packed, though.
The idea their build costs are lower than a Hyperoptic or efficiently run PIA-based network is a difficult one to agree with.
Lower than others building all their own ducts and drops, sure: keep the build to the closest packed terraces and you can do that. As can anyone else, and in the case of their build locally have as they’re competing with at least 3 of Openreach FTTP, VMO2, CityFibre and Netomnia.
In Leicester they pick a block of streets, then a large gap, then another block of streets.
Its clearly more efficient than rolling out to remote rural areas though, we have to remember in a normal commercial driven rollout, Openreach wouldnt be touching many of the areas it is doing, its politically and subsidy led by a government who has many voters in rural areas, so not a normal rollout.
I expect they might be piggy backing on existing infrastructure e.g. cityfibre already had a fibre loop in the city, so they could be building out from that and just leasing use of that fibre from cityfibre (as well as backhaul).
I am also not sure if affluency has much of an affect on take up of these types of services, it just seemed a convenient excuse to cover the political intervention of where openreach rollouts are happening.
I have argued in the past something like a fast internet connection is perhaps more important to the poor as they are more likely to download pirated content, and make use of the internet for entertainment vs someone who can afford to go on holiday a lot, go out for meals, cinema etc. Sure not gigabit speeds but perhaps at least a few hundred mbit second. Driving around my city shows VM have a very high takeup compared to openreach, based on visible wifi access point names. I expect that is broadband speed driven, and my city is one of the poorest in the country.
Also that cityfibre prioritised the lowest income areas is interesting as well
Cant edit my reply, but forgot to add the streets chosen by grain are extremely close to the existing cityfibre loop.
Depending on what you mean by poor? I see, hear, know of a fair few people who say they are poor, and yet they can still afford their Sky TV, booze and smokes, also don’t forget their handful of scratch cards every week. Also, the more expensive food, yet they still say they are struggling to pay energy bills.
Then you have got the poor, who are struggling with the basics.
The problem is internet connection is needed for so much these days and the price of FTTP from a lot of Altnets are cheaper or the same as FTTC from the big boys. I pay less for my 500Mb/s than a lad at work who decided to stay with BT FTTC at 35Mb/s because he trusts BT.
I suppose some Altnet have to slow down and concentrate on getting customers, which is what I have said before and got shot down in flames :).
I noticed Zzoomm up here a couple of times in the last week, so FTTP is expanding up my road, but not that fast.
Not a poor road, not a rich road either, after all I live here 🙂
“Expanding in lots of poor areas. Mmm. Can’t imagine take-up is strong.”
It doesn’t need to be. Less affluent areas have higher population densities, so the network distance per property passed is much less than middle income or wealthy areas. Whether using your own ducts or PIA, higher population density equals much lower cost per property passed, and therefore lower take up can be viable. There’s also the aspect that if much of somebody’s income is from the state, they have very low income risk compared to the quite high income risk of somebody in the gig economy, possibly reliant upon zero hours jobs.
Think in terms of frontage. A terraced street can have as little as 4m of frontage per property. My unexceptional suburban property is on a corner, and so the frontage is around 40m. The handful of other houses in the close have much lower frontage distances, but the average drop from the pavement to the property is a further 8m or so, compared to perhaps 2m for a Victorian terrace, so the network cost of serving properties in my close will be around 3x that of a terraced street.
This is why VM have such a heavy presence in poorer areas. There’s also an imbalance when it comes to customers wanting and getting continuing discounts – the winners from switching and re-contract negotiation tend to be middle income, market-engaged customers, whereas elderly, poor, disabled, large families, or disengaged customers who are more common in low income areas are less likely to benefit. And that in turn means like for like, poorer areas get lower discounts on a like for like basis.
For any services business, the ideal customer is somebody who lives within their means, has a secure income, doesn’t make many demands, and doesn’t demand discounts or keep switching. If they’re low income, but tick those boxes then that’s ideal. Wealthy, engaged customers (probably like you and I) are more demanding, fickle, know what’s on offer elsewhere, and we recognise that customer loyalty is an unrewarded fiction. We’ll get the best deals for new customers (often loss making, despite perhaps being large and nominally pricey bundles), we’ll be onto the supplier as soon as the fixed term discount expires, and we’ll move to a new supplier if the existing one won’t play ball.
So poorer areas can offer marvellous pickings for ISPs and altnets, if they play their cards right.
“Its clearly more efficient than rolling out to remote rural areas though, we have to remember in a normal commercial driven rollout, Openreach wouldnt be touching many of the areas it is doing, its politically and subsidy led by a government who has many voters in rural areas, so not a normal rollout.”
Seems a bit of a kooky theory. BT isn’t running their business to the whims of the incumbent government. I believe they’re gladly taking the tax breaks but that’s about it. There aren’t that many actual subsidies in play these days, and the “gigabit vouchers” are often more faff than its worth.
The business case is that they’ve finally recognised the need to endure short term pain for long term gain. Unlike the altnets, they stand to save tons of money by jettisoning copper and FTTC cabinets and all the rest of it. That’s an even bigger saving in very rural areas where fibre is effectively maintenance free, much more weather resistant, and won’t need armies of technicians to try to bring the speed up.
And of course, having fibre everywhere also dovetails nicely into their 5G rollouts too.
‘I suppose some Altnet have to slow down and concentrate on getting customers, which is what I have said before and got shot down in flames :).’
I remember this conversation. Grain are saying they can’t afford to continue building at the existing pace, hence have had to cut jobs, and with that in mind are concentrating on increasing uptake.
If they were healthy financially they’d continue to do both – it’s not like they weren’t trying to increase uptake and in a healthy business shouldn’t be an ‘either-or’ – there should be the resources there to both sell aggressively in passed areas and pass new ones apace.
This business rewards economies of scale heavily. None of them are slowing build voluntarily.
Should they get the funding they’ll now have to rehire people to get the build back to pace. That is not something anyone wants.
They’re running out of cash and are trying to conserve it while they try and raise more. That isn’t a positive.
For a long time, I could never understand why the uptake of Sky was so high in poor areas. Then it was explained to me, and once you understand it makes perfect sense. Basically, Sky or VM is cheap entertainment. Now you might say not it’s not, but actually it is. Have you seen how much it costs to go out to the cinema or a season ticket to a premier league club? Have you seen how much a day out at an attraction is?
When taking this into consideration what might look irrational to you in different economic circumstances starts looking like an entirely rational choice in maximizing the value of a limited budget for entertainment.
How’s that “we will never plants new poles” statement looking?
I thought about signing up, but was put off by them not providing customers with their own public IP address and not being allowed to use your own router. Even if you want to get into their router’s settings you have to phone up and ask for a login to the config pages. Bit of a shame really as their pricing is pretty competitive.
I use Grain and you can get a fixed static IP for £5 a month.
Also, I use my own netgear nighthawk router. I Just emailed them and they put my grain router into bridge mode. All they needed was the mac address of the router.
@Sarah Bainbridge, but why not just allow people to use their own router instead of going through that step? That means people will have three different devices to get broadband and three devices taking energy, may not be a lot of energy, but it still adds up,
That is one thing about Zzoomm, they do allow the use of your own router connected directly to the ONT, sadly they don’t tell people how to do it on their website, I had to work it out myself, not difficult for me, but may be for some.
I realise that providers prefer you to use their own hardware, certainly when it comes to support, but it is nice to have the option.
Anyone know of whole areas missing from the tbb maps for Grain Connect do drop us an email and will look at getting them added
additions at thinkbroadband dot com
In an ideal world they’ll be places where its the first FTTP network.
Wild numbers fast – bound to happen
Many Altnets have already followed this same pattern of cutting jobs and slowing the build rate as they face financial difficulties.
As financial pressures aren’t easing, some are preparing for a second wave of job cuts.
I have a family member working at Cityfibre who says things haven’t improved since the last round of job cuts and are expecting more to be announced shortly.
Yes, I’ve heard similar rumours regarding more cut backs and job cuts at Cityfibre.
Just waiting for an update.
I’m sure Grain have a great business model and will continue to prosper. But why set yourself up to fail by claiming the lowest construction costs in the industry and on track to be the first to be EBITDA positive – how could they possibly know? They may well be amongst the lowest and amongst the first. But why claim absolutely to be the lowest and the first? Or am I just being pedantic?
In the beginning the investors only had a business plan and estimates of likely take up. Now there is facts and figures of take up. Combined with higher interest rates (actually current interest rates are around the long term average for the uk) it’s not surprising investors don’t want to keep pouring money in to a bottomless pit.
What a lot of supersillious semi self priveledged poppycock, talk about designer label snobbishness I was glad when computer learning and internet use was seen as a hobby frequented by many real enthusiasts, now as everything the whole system is monetarised and supported by the highest fee paying advertiser. To use social demography as a measure of people’s willingness or ability to pay or sign up to what was once seen as a community service in the fullest meaning of the phrase is tantamount to class fascisim should our homes wear a supplier badge to show proudly our ability to afford the most costly utility service get some humility please!!!.
” should our homes wear a supplier badge to show proudly our ability to afford the most costly utility service get some humility please!!!.”
Some people would I expect, there are some who love showing off that they have the latest, best, fastest thing.
I know of someone like that, get a new top end phone, people need to know, they loved telling me a few months ago about their new super-duper fast 1Gb/s fibre, their high spec computer that they paid nearly a couple of grand for and their new Audi car. I am sure if he could put a badge on the front of his house saying “I have 1Gb/s fibre” he would :).
i wish I knew how he does it, he earns less than me.
Oh well.
@Ad47uk
I would suggest if that if you looked at your friend’s debt pile things probably don’t look quite as rosy…….
‘I know of someone like that, get a new top end phone, people need to know, they loved telling me a few months ago about their new super-duper fast 1Gb/s fibre, their high spec computer that they paid nearly a couple of grand for and their new Audi car.’
Yeah the phone will be on a contract I imagine. A couple of grand isn’t a really high spec computer and could easily be on tick. An Audi isn’t a super-duper luxury car, it sits in between the standard run about and the Beamers, Mercs, etc, and is probably on finance too.
If that fella’s having trouble making repayments and is having to use credit cards to get through the month that’s all going one way. Debt spiral central.
Update on footprint…
As of morning of 31st October 2023, Grain Connect footprint thinkbroadband has mapped is 95,009 premises passed and of these 49,484 also have another FTTP option available.
Mapping updates will continue, the vast majority of the growth has been increased growth around existing spots.