FullFibre Limited Drops Out of UK Project Gigabit Broadband Contracts
The UK government has today unexpectedly announced that alternative network operator FullFibre Limited (Fibre Heroes), which recently completed its merger with Zzoomm (here) and confirmed further job losses (here), has “mutually agreed to terminate” their state aid supported Project Gigabit broadband roll-out contracts for the Derbyshire Peak District and Herefordshire.
Just to recap. The combined full fibre (FTTP) broadband network, which currently covers 600,000 premises (ready for service) and “over” 70,000 customers (up from 65k+ in January 2025) across England, secured both the £23.4m West Herefordshire and the Forest of Dean (Lot 15) contract – aiming to cover 7,900 rural premises – and the £10.7m Peak District (Lot 3.01) contract – aiming to cover 4,400 premises – back in April 2024 (here).
The first premises under these were due to go live by the end of 2024, with Lot 15 expected to benefit areas such as Hay-on-Wye, Hereford, Kingstone, Ewyas Harold and Ross-on-Wye. By comparison, Lot 3.01 was due to help connect towns and villages such as Matlock, Birchover, Buxton, Ashover and communities in the Hope Valley.
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However, in a brief statement released by BDUK a few moments ago, a spokesperson for the agency said:”BDUK and FullFibre have mutually agreed to terminate the Project Gigabit contract for West Herefordshire and the Forest of Dean. BDUK is now moving swiftly to put in place alternative plans with other suppliers to connect premises that were due to be covered by this contract.” An identical statement was issued for the Peak District.
At the time of writing we don’t yet know why this has occurred (we’ll be seeking a comment), 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) and Freedom Fibre then did the same for Cheshire (here).
Smaller altnets are currently known to be under a lot of strain from high interest rates, rising build costs and competition. The outcome is also starting to call into question the credibility of awarding so many Project Gigabit contracts to smaller players, although it should be said that many other altnets are continuing to deliver on their promises to the scheme.
UPDATE:
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FullFibre Limited has declined to comment.
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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So much for the promises made to Dankshire Town.
What happens now?, altnet1 stopped halfway, altnet2 pulled out of BDUK, OR say we are not on the plan.
The whole thing would have been done if the politicians had kept out of it, and OR had been nationalised.
bitter? moi, yes I am!!
Nationalisation is the cause of problems, not a fix.
Businesses can not keep their promises when it is the government’s policies that are undermining the economic viability of those “promises”.
Will speculate BDUK at least had the sense to not pay up front (which would suggest funding is still there), and hence these operators having to pull out as they in such a bad state they cant even fund a state subsidised rollout.
I am not familiar with the process, but I assume the problem could be one of cash flow if there is not payment up front. This is not ideal for the company concerned or the taxpayer. The whole rollout of fibre broadband seems have been badly managed, with over kill in some areas, and nothing yet in others. In the area of Dankshire town the infrastructure is there, poles, ducts cleared etc.
It’s not unusual for such state aid linked projects to only pay out the public side of their funding after something has completed, thus minimising the risk to taxpayers and political fallout. This is why BDUK sets the financial bar quite high for approved suppliers, but even then, companies can still fail.
FullFibre Limited knew this when they went into the contract (signed fairly recently), so something else must have happened over the past year to change their plans. Some possible explanations include a retreat by investors, the recent merger causing unexpected issues or engineering surveys revealing that the build would be significantly more expensive than first thought, etc.
The costs of delivering these roll-outs have increased due to the policies introduced by this government since the AltNets took up the BDU contracts. You don’t seem to have noticed that the economy has stalled and financial costs, rather than continue to fall, might now instead start rising again.
Economic reality bites. We have seen 02 pull back investment due to a corporate-wide review by Telefonica, though the rise in business costs in the UK would have been another factor in the decision. Other AltNets have already flagged cutbacks in headcount and roll-outs; the low take-up figures will be a factor, but increased employment costs will not have helped. Even this week, we have seen the impact on BT with it having to make asset sales just to stand still. In the latter’s case, if they cannot accelerate the decommissioning of heritage infrastructure and the completion of the FTTP program, they could start making serious losses.
Of course had the government of the time not put a stop to fibre, then we would not be having these issues.
Peter Cochrane & Thatcher, worth a read
Not true. We might have had an earlier start, but none of it would be the technology we are using now. The facilities would also not have help BT avoid the financial crises that stopped the roll-out each time, and they would have been sold anyway because BT could not guarantee a steady order book.
Well it seems to have worked ok for South Korea, who were surprised the UK pulled out of the project.
Potentially the problem is that those bidding have simply under estimated the real cost of deploying network to get the contracts .in the hope of getting more funding or time . Deploying full fibre is not low cost so it’s just a matter of time when u see more pull back when they survey and realise they have massively under estimated the costs !
Feel sorry for those communities now losing another few years waiting for a provider to be agreed