Delays as CityFibre Suspends More UK FTTP Broadband Builds UPDATE3
As fibre optic network operator CityFibre continues its drive to reduce costs and boost coverage growth, such as via mergers and acquisitions (here), the news starting to reach us today is that they’ve also taken the decision to “pause” more of their full fibre (FTTP) broadband contracts with UK build partners (contractors).
So far the operator has already expanded their 10Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP network to cover 3.5 million premises (3.2m as Ready for Service) and they hold an ambition to reach up to 8 million 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 network currently has 337,000 live customer connections.
However, few are immune to the market’s current challenges, which has seen some operator facing issues like rising build costs, competition and other factors, such as the need to generate strong take-up or the difficulty of attracting new investment while interest rates remain stubbornly high. The need to reduce costs and improve efficiency may have also played a role in some of last year’s job losses and build suspensions (here, here and here).
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The news today is that CityFibre recently instructed another batch of contractors to “pause” builds in various locations. A Construction Enquirer report claims that this is impacting projects in locations such as Leeds, Sheffield, Wakefield, Rotherham and Barnsley, although CityFibre inform that only Wakefield and Barnsley have actually been paused in November 2023. But feedback suggests the situation may be impacting some of their other commercial builds too (excluding any BDUK / Project Gigabit contracts).
A CityFibre Spokesperson said:
“Given the pace and scale of our nationwide rollout, we continually review the prioritisation of our deployment locations, considering a range of factors including our expanding participation in the government’s ‘Project Gigabit’ rural rollout programme. As part of this review, we have decided to pause a number of local builds while we determine next steps. Our wider rollout remains on track.”
The decision to suspend a build or build partner is one that can cause delays to related projects. CityFibre may now have to find and appoint a new construction firm to replace those impacted by the latest change – assuming that’s the plan for every impacted location, which in our experience is a process that can sometimes take up to around a year (sometimes longer, sometimes less). Job losses (at contractors) can sometimes follow such changes.
At its peak, CityFibre was working with around 40 contractors, although today they’re understood to have around half that and thus seem to be re-focusing to work with a smaller number of partners to manage the bulk of their work (we believe they’ll end up with c.15 civil engineering contractors).
The operator also aspires to secure more contracts under the government’s Project Gigabit broadband rollout scheme and these are likely to be on the larger ‘Regional‘ side (like those previously won for Hampshire, Norfolk, Suffolk and Cambridgeshire – here and here). Such a big win would naturally necessitate some rotation in their build programme and resources to focus on those, which would also support the c.500k of complementary commercial build in related areas.
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As expressed in this morning’s separate, albeit related, article (here) – CityFibre are currently looking to grow their network coverage by another 1 million premises (mostly from own build) this year and, given today’s news, it’s looking like a big chunk of that will also be delivered through mergers and acquisitions (M&A). In theory, over the next couple of years, this could add up to 2-3 million extra premises, assuming their talks bear fruit.
All of this may help to explain the inevitable contractor shuffling we’re seeing today, which makes good sense when looking from the operator’s own business minded perspective and the challenging market conditions. But much as we said earlier on, the catch is that it could mean delays to yet more existing build locations – at least those that get disrupted – and possibly more job losses among contractors.
On the flip side, taking a bit of pain today could put CityFibre in a much stronger position for the future, assuming they manage to pull it all off. The operator has often proven itself to be resilient in the face of strong challenges. Lest we forget, there was a time, many years ago, when few believed they’d ever be rolling out FTTP to the scale we see today.
UPDATE 1:46pm
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We’ve had an additional comment from Cityfibre.
A Spokesperson for CityFibre:
“Since early 2023, CityFibre has been proactively evolving our build plan to reflect the volatile operating backdrop and competitor deployments as well as our growing participation in ‘Project Gigabit’ and commercial expansion around it.
We delivered 1m RFS premises in 2023 and we expect to deliver a further 1m in 2024. The majority of these will be delivered through our build programme and existing build partner portfolio, with the remainder resulting from a well-developed pipeline of M&A opportunities. We remain on a strong financial footing to deliver our 8m premises rollout target.”
UPDATE 3:05pm
CityFibre have informed that, in Yorkshire, only their Wakefield and Barnsley builds have been paused. The works are thus still underway (no pause) in Sheffield, Leeds and Rotherham.
UPDATE 30th Jan 2024 @ 6:49am
Sometimes one of the challenges in trying to get to the bottom of a particular situation is in the need to dig into the subtle nuances of language, such as “pause“. As expressed above, we’re aware that more locations than those mentioned earlier are being impacted by recent developments (this extends beyond Yorkshire), but figuring out and confirming exactly what is happening and where has not been easy.
For example, take Leeds. Yesterday various sources, including a separate news report, were informing us that Leeds was one of those locations that had been placed on a pause, which CityFibre later informed us was not the case – even though there’s precious little build activity actually showing in the city right now. Shortly after that, we received more feedback that appeared to further contradict CityFibre’s position.
Part of the problem is that the operator’s build status for various locations is currently best described as being “fluid” and apparently this isn’t something that always fits a neat definition. So, while CityFibre say that Leeds might not have been “paused” or stopped, they have since acknowledged that builds still underway by OCU may be “slowed down” (i.e. the focus switches to infill / remedial works and customer connections etc.), which we understand could also be a description that might be applied to Sheffield and Rotherham.
Various other CityFibre contractors, covering other locations, appear to be in a similar boat this week. But the operator’s goal is still to try and get these locations back on track in the future, when they can hopefully resume core build. Part of this may see some contractors being asked to switch their focus to other builds, before switching back to the previous ones at a later date.
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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I guess I should be honoured then only been connected to 2.5Gbps for 3 weeks after CF finished the build a month before. My neighbours were looking forward to them being covered I guess not now.
Lucky you, getting 2.5Gbps. I’ve been told by CF no quicker then 1Gbps in our area.
The problem there is that because CF are not vertically integrated, while they have released >1g products nobody except Yayzi is selling them.
Some areas have exclusivity deals, so despite the faster products being everywhere from CFs perspective, in some areas there is no way to buy them.
“The problem there is that…”
Several ISPs currently have active customer trials of the same service, but are also waiting for Openreach to finish their XGS-PON upgrade programme (imminent). The providers also have to consider the extra costs of supporting faster packages, so it’s something that usually comes with a window of adaption and isn’t merely down to issues of exclusivity.
Excellent: consider running a Tor relay on it if you have that capacity there. Not an exit node, they explicitly say not to on broadband, but a relay would be useful.
Richard, many CF area stilk only have GPON, thats why they made a 2G GPON product, the XGSPON coverage might actually be less than half, was reported as 20% of footprint end of 2023, the 90% FEX seems was quite misleading.
UK are in a mess right now. Always fallen behind than rest of the world. Not good.
It would be interesting to know if other countries have adopted the same free for all model the UK has adopted and how it working elsewhere. Perhaps sometime Mark could do an article comparing the UK and other countries builds.
Meanwhile Openreach are planning to build FTTP to an additional 4 million premises per year, for the next three years.
Arguably it’s the competition that is driving Openreach to go faster. They sure did very little before ambitious alt-nets came along. The competitive environment has probably taken years off the full roll out.
Considering the UK (BT) started the move to FTTP in the early ’90’s it’s very disappointing to see so many different companies rolling out Fibre. At the time I worked for BT and was just about to move to the ‘Fibre’ department. There was so many stories (and still are) why BT stopped the work and sold off the customer premises equipment designs; from ‘It’s an Ofcom order to it’s a government decision, all stating it is ‘Anti-competative’. The UK has lost so much as the customer fare offered so much more than just Telephony – Data (now Broadband), TV distribution (The UK is so short of available, usable radio spectrum). The country has even lost the income from Licensing the equipment designs.
More and more redundancies on the cards, City Fibre knew builds would last 2-3years yet brought people in on long term contracts paying inflated wages to get them in, they now have to pay over the odds to lay those people off… Whoever neglected to figure out it needed and exit strategy should be removed never to work in the industry again…
But think of all the people who benefitted by taking home an inflated salary for a few years, and now getting a big payout. Who would you want to punish someone for doing that?
Hey TC aka DF. How’s it going with your new job?
DF, the full point of inflated wages was the fact everyone knew the build would eventually slow down or come to end.
I suppose it would make sense if those builds were where one of the competitors the were seeking to acquire had already built, but even so the two articles on here today seem to be sending out very mixed messages.
Mark any info about Edinburgh. There roll out seems to have completely halted there too.
It would be good to get some detailed updates on the BDUK contracts. Since Hampshire was awarded there has been no information forthcoming. The more and more of those contracts they get, and the less they demonstrate an ability to deliver at scale, the more confidence in delivery of the BDUK contracts should fall. They can’t acquire their way to delivering those connections.
It’s not unusual, after a contract has been awarded under Project Gigabit, for there to be a period of several months for engineering surveys / plan finalisation before the build itself starts. The Hampshire build was tentatively due to start this month, so you can probably expect some news about that in the near future.
The altnet that wants to buy other altnets cant even get their own house together straight
Of all the altnets they have by far the widest coverage.
To me it just seems like their next decision is to evaluate the cost of building themselves versus buying what others have already built.
National infrastructure for FTTP should have been awarded to Openreach, all these overbuilds are ridiculous resulting in hassle for residents and many pot holes in the future. Most of the fibre in overbuild areas will end up never getting used as firms go bust or get bought by other companies that will use their own existing fibre. Where I am FibreMe is still finishing its building yet no one can order it, and we already have Virgin Media, so all the road works and traffic jams caused by their works in our town provides no benefit at all and no added competition. CityFibre have said they intend to build here as well, so more road works, more dug up roads and pavements for future potholes, then Openreach do their build.
Overbuild? Ha! Not here.
Virgin Media gobbled up Upp early in their build.
City Fibre’s contractor went bust.
OpenReach FTTP has been planned for years but never gets any closer.
All there is is shitty Virgin Media and their old coax network. No FTTP in sight. And this is in a city. The whole situation is a mess, and if it was all on Openreach to build the national infrastructure then it would be worse as at least Upp and CityFibre tried to start building here.
Maybe not.. When they came here they dug up the middle of 1 street (1 out of 7 in a row) and then used PIA to get to the poles and then to us.
It surprised me but it works. I have offered to share some of my connection with a neighbour who looks after me when I need DIY doing.. he’s in the next street that seems is going to miss out.
Zoooom is building about a mile away so who knows..
Your having a laugh, openreach investing in the future, never, only reason their playing catch up is the altnets leading the way. Should have been built 20 years ago
Seeing as they have dug and laid cable in streets here with no other current FTTP provider, I’m hoping they bring them live.
You feel its worth their while, although I’m not knowledgeable enough to know if that is possible for patches here and there.
It could be they are just moving the workforce to focus on Sheffield and Leeds to get them RFS faster and earning money and then going back to the towns later. I guess we’ll never know, though.
Ill answer that for you:
No!
Here in Redcar CityFibre have been laying cables, engineer told me it is almost ready for testing, yet after looking at city fibres website it says they will inform us a week before they come and connect to homes. We have not had any letters yet the are disrupting our roads and alleyways
They laid cables and put cbt’s on the poles but still can’t order several months on in Bath. Have tried numerous times to get any sort of update but they haven’t got a scooby doo!
Bathuser: We got Truespeed buggering around in my part of Bath,work is expected to completed by March this year, real shame CF pulled the plug here.
Just to point out that Wakefield is in West Yorkshire.. not South Yorkshire.. Barnsley is in South Yorkshire and wishes it was in West Yorkshire… Next news Leeds will be part of Lancashire… 😉
Barnsley is very comfortable with its status as a South Yorkshire town… No desire to join West Yorks that I’ve ever heard of!
City Fibre have been promising a service for a couple of years and frankly I’m fed of waiting for them. I live in Wakefield, so the news of this new delay doesn’t enamour me to the company. Virgin Media, likewise, have been aggressive to the point of strong arm tactics in my area, and as they’re the only viable choices, I despair of ever getting fibre years after promises from everyone and a rubbish copper system with BT that had the gall to call itself a fibre network.
Netomnia and Openreach won’t be far away.
Its a huge shame that the Wakefield build got stopped, lots of hard work and dedication went into it.
I hope you get FTTP sorted ASAP
It’s unfortunate but was probably inevitable. Netomnia built faster in the same areas of the city and took their lunch as far as take up goes: Netomnia’s take up in Wakefield is really impressive.
Openreach are furiously building in the city, Nexfibre/VMO2 are infilling as there was a lot of home building in between their predecessors’ builds and now, and the local authority is at >80% full fibre with tons of streetworks still outstanding.
In that environment the CityFibre build is too slow and costs too much. I feel for the OCU guys: parts of the build completed were very difficult and they got them done.
XGS
You are 100% correct.
The OCU team involved were great guys.
Netomnia sell 1000/1000 for a good £10 cheaper than any Cityfibre product also.
Virgin building at speed too doesn’t help although I think a lot of people are fed up with how expensive virgin is in 2024.
One minute city fibre are buying the competition the next they’re laying off staff and slowing build. Talk about mixed messages.
But on the bright side they’re absolute gold for creating talking points for the contributors to the comments section of this site.
Not really. It can be far cheaper to buy something someone else built than to build it yourself. That’s how Virgin’s (then NTL’s) network was built. Cheap assets bought up in fire sales..
I genuinely haven’t a clue what they paid for operators beyond their sending themselves into bankruptcy paying £8.2 billion in 1999 money, just under £15 billion now, for 4.3 million premises passed.
I am sure most operators would be happy to sell at that price per premises.
AIUI cable wasn’t so much a “fire sale” – but instead NTL and Telewest were technically US companies and could take advantage of the much more liberal US bankruptcy laws to try to get rid of the debt.
VM was also a US company for some time, I believe until the Liberty takeover when it was re-incorporated in England?
“CityFibre have informed that, in South Yorkshire, only their Wakefield and Barnsley builds have been paused”.
Err, Wakefield is in West Yorkshire, not South Yorkshire!
Just shows the calibre of people they’re employing.
Yorkshire is to far north for the big wigs to bother visiting, so they wouldn’t know.
With regards to Mark’s update this morning.
The trouble with pausing any build is that you then potentially leave the field open for another player which was why a couple of years ago everyone was trying to make as big a land grab as possible in the so called altnet gold rush. The one player that is not likely to be pausing anytime soon is Openreach so if you pause for any length of time you may find when you return Openreach have been in and already grabbed a sizeable chunk of the customers making your task even harder, so I would not be surprised to see at least some of these pauses to become permanent.
Indeed
CF can some part of this town – but Zooom are building about a mile from us.. So her’s hoping they get there first because as far as I know they don’t use CF?
I’ve read the (redacted) Cumbria regional procurement contract.
Whilst not a riveting read, the wording does seem to suggest that BDUK could amend the scope if an OMR indicated properties within the intervention area become part of a commercial build plan.
Obviously, this could only physically happen if the regional builder hadn’t got to those properties yet
So, does Mark @Big Dave or anyone else know if this could happen ?
As Openreach are now passing 60,000 properties *per week* you would certainly image they have the capacity to, say, quickly build out a large village or small town without too much bother if they both wanted to and were allowed to.
As CF have 4 regional contracts on the go, all running for years, is this a risk or am I making all this up….
CItyFibre seemed to have stalled the rollout in Leamington/Warwick too. We had ducting installed over a year ago and they spent most of last year doing the other streets across the town. But they have not even started building their fibre exchange (unless they’ve moved it elsewhere).