Freedom Fibre Drops Out of Project Gigabit Broadband Contract for Cheshire UK
The Government’s Building Digital UK (BDUK) agency has just unexpectedly announced that alternative network provider Freedom Fibre has “mutually agreed to terminate” the £43m (state aid) Project Gigabit broadband roll-out contract for Cheshire (Lot 17), which would have expanded a full fibre (FTTP) network to 15,000 premises in hard to reach areas.
The contract, which was formally announced in May 2024 (here), would have seen Freedom Fibre expand their gigabit broadband network across large areas of rural Cheshire, including several remote villages, such as Kingswood, Allostock, Minshull Vernon and beyond. The building work on this was originally expected to commence during “early 2025“, but that will no longer happen.
However, in a brief statement released by BDUK a few moments ago, a spokesperson for the agency said: “BDUK and Freedom Fibre have mutually agreed to terminate the Project Gigabit contract for Cheshire. BDUK is now moving swiftly to put in place alternative plans with other suppliers to connect premises that were due to be connected. Freedom Fibre has not received any public funding for this contract.”
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At the time of writing we don’t yet know why this has occurred (we’ll be seeking a comment from FF), although the development follows only a few short months after another network operator, Voneus, similarly dropped out of the smaller £12m (state aid) Project Gigabit broadband roll-out contract for Mid West Shropshire (here). Smaller altnets are currently known to be under a lot of strain from high interest rates, rising build costs and competition.
UPDATE 10:06am
We’ve managed to get a comment from Freedom Fibre.
A Freedom Fibre spokesperson said:
“Stepping away from the Cheshire Gigabit project before the build phase was a difficult decision, made after careful consideration. While we are disappointed that we should not proceed with the project, this decision enables us to focus on delivering high-quality fibre infrastructure in our priority areas. We remain committed to expanding full-fibre connectivity to communities and will continue working closely with our partners to bridge the digital divide.”
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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Is this a failure of BDUK to do it’s due diligence and stress testing? This is a worrying trend.
I think there is not enough information publicly available to make that call. It is also worth pointing out that the contract was awarded prior to the 2024 general election. Since then, employment costs have increased, the economy has been stalled, and the public is cutting back on expenditure.
I’m pretty sure the builders financial backers can pull the plug at any time until the contract is signed. With how fast the money markets are changing, they’ve maybe got cold feet since putting their bid in. Not a lot BDUK can do about that.
The projects are also bid before DD so, inevitible some wont be viable.
I wonder if Openreach announcing commercial builds on the Freedom Fibre footprint has caused this ? They did this in our village a few weeks back.
I’m assuming such an announcement would affect the public subsidy available to FF under the contract.
If this is the case, and it is happening elsewhere in Cheshire, then this might be at least part of the reason.
Possibly, although it hasn’t stopped Gigaclear building to North Newington near me under BDUK despite the fact that Openreach have already built it.
Good point but I guess it’s a different economic argument to overbuild an existing supplier. Hopefully, Gigaclear have done the sums and it should still make them a profit …
In this case, FF haven’t got to us (or anyone else under the Cheshire contract it seems) but Openreach have announced a build here (we are exclusively very slow OR fttc).
If, like other AltNets, FF have funding issues, then it can’t help if your planning has to constantly change as commercial builds are announced and the flow of public funding is disrupted.
Just not worth the hassle, perhaps, and what money they have probably better spent elsewhere.
sounds like it made no commercial sense and the costs were too high for FF. Also FF seem to have all but stopped existing expansions, for example in my area Warrington, they appear to have halted work they had been planning for over 2 years, their presence locally has disappeared, in the same street only some addresses covered, their comms team not answering emails or queries. Would assume they are wanting to see and will be pushing their partners to enhance take up on existing footprints rsther than expanding.
I think the BDUK initiative might be at risk; without additional funding, the contract awards will not cover the roll-out costs and the consequent low take-ups from the public. The full-fibre initiative should now probably be refocused on urban areas to maximise returns from fibre deployment.
The BDUK funding is only available for rural (hard to reach) areas. Urban areas are generally over supplied with FTTP, even if it is cheaper.
@Chris Jones – try telling that to all the urban households (including mine) that have been deemed too expensive and ignored by commercial rollouts.
“Hard to reach” simply means too expensive. And that applies to urban areas too. Focusing just on rural areas is not the right approach. Everyone excluded by commercial rollouts should benefit.
How are the other 30-odd BDUK contracts working then? Suppliers won’t just be building at a loss.
@Sonic, most urban areas already have better options than the hard-to-reach rural areas. 5G coverage and performance is focussed on urban locations, and very few urban areas can’t get respectable FTTC at least. Many rural areas struggle to get 5Mbps, and are on aging infrastructure with unreliable supply. 4G coverage is also often poor, or even non-existent.
Of course urban areas that don’t get Gigabit broadband deserve improvements moving forwards, but prioritising those rural areas that get little better than dialup is not unreasonable.
@Chris Jones:
There is no over supply in built-up areas. In many parts of London, there are still large areas without FTTP – more so than some rural areas that have benefitted from subsidised rollouts.
@Anon:
All providers benefitting from BDUK funding will be experiencing cost increases and a fall-off in demand due to the public cutting back on spending. It is entirely possible that bidders will be encountering difficulties or even considering the pausing of roll-outs.
@NeilG:
The trouble with deployments of FTTP to rural areas is that there is a much lower density of potential customers than is available in urban areas. Urban areas, particularly those where high-density residences predominate, are not seeing any FTTP deployments yet those are the locations where the return on investment is likely to be the highest..
They contracts are not commercially viable, the methods used to calculate costs do not align with reality sadly. It would cost providers 3-4 times the amount to actually deliver the contract. This might be appealing to the big players, but not for alt nets.
So why did they bid, and accept the contract, in the first place?
Yeah ok, there’s a load of suppliers all over the country building 30 something contracts all running at a loss! It simply wouldn’t happen, the suppliers funders wouldn’t allow them to carry on
@Anon:
The AltNets are by and large being funded by debt, which they are burning through very quickly. They are building these networks in the hope that they will become profitable in the future. I doubt that those running with less than 60pc take-up are making much of a profit, if at all – especially at the discount rates that many of them seem to be offering.
Because these BDUK bids are put together many months in advance where (a) the ACTUAL homes that are going to be subsidized are not known (and is subject to change, which requires design rework) and (b) the current financial landscape (capital available, debt, interest rates, market uncertainty) 12 months ago when this bid was likely put together was vastly different.
The list of properties is known from the start, any change the ISP would have to agree to it. Fair point about financial markets changing though. It must be tough if you’ve got a big government contract in your hand and your funders still won’t give you the money
It’s a pity there wasn’t more detail given in this announcement.
However, short of someone directly involved spilling the beans, the reason(s) will remain speculation.
Only delay and uncertainty are assured for the people of rural Cheshire, I think.
These huge contracts take years to set up, run, and deliver.
Huge targets for economic and technological change to torpedo them.
Another one bites the dust.
Margins were probably tight to start with. Adding in the hike in employers’ NI rate of 1.2 percentage points to 15% (an around 8.5% increase) along with the NI threshold being reduced to £5k from about £9k in April that was not known about when they bid for the contract (which further increases payroll costs well above that 8.5% increase), along with the well publicised change in tack amongst a lot of Altnets from building out networks to instead concentrating on turning premises passed into connections, stubbornly high inflation, etc., is all likely to lead to the ‘odd’ redundancy quite soon. As a result, they may then not have sufficient manpower or margin to complete the project.
As to how any of the other 30-odd BDUK projects are going, I can only speak for Lot 15, for which FullFibre (Fibre Heroes) were the successful bidders in April 2024. Shortly after they got the contract we were informed that planning had started and was (IIRC) due to be completed in late 2024. Here we are approaching the end of the first quarter of 2025, a month off a year since they were awarded the contract, and the planning stage is still not completed.
A (rurally) near neighbour met a couple of FullFibre surveyors in late August who said they thought we would have full fibre broadband in about 6 months, i.e. about now. ‘Yeh, I bet!’ I thought at the time. I did tell my neighbours that was extremely unlikely.
I must admit to now getting slightly concerned that my area (and similar areas within the overall contract) will be in the same boat as when Gigaclear descoped close to 8k properties (the subject of the contract FullFibre now have to bring fttp to) in late 2021.
One would presume as delivery has been lacking due to current market conditions BDUK has subsumed the project into a Type C lot for the well known incumbent to deliver and maintain their monopoly status.
Great news. I just got notification from Openreach that we are now in their fibre build plans (postcode CW6 0..). We were previously ‘gigabit white’ or whatever it is that means no plans in the next 5 years. We were in Lot 17.
Cool.
Although I like that some altnets offer synchronous speeds, I like the reliability and provider choice that Openreach gives.