Openreach Win £157m Project Gigabit Broadband Build Contract for Scotland

The UK Government today confirmed that Openreach (BT) have been formally awarded the £157 million state aid supported Project Gigabit broadband roll-out contract for Scotland (Call off 6). The deal will see the operator extending their full fibre (FTTP) network to cover an additional 65,000 of the hardest to reach rural premises.

The latest development forms part of Openreach’s earlier Single Supplier Framework agreement (here), which saw them being chosen to deliver all of Project Gigabit’s Cross-Regional (Type C) procurements – reflecting “up to” £800m in total state aid to help upgrade 312,000 premises in rural areas of England, Scotland and Wales (the previous Type A [local] and Type B [regional] contracts have all gone to smaller providers).

So far, the government’s Building Digital UK (BDUK) agency has already awarded most of the contracts related to their above agreement, which until today reflected six Type C contracts awarded since August 2024 – a total of around £577m in public investment to help reach a further 227,000 premises in digitally disadvantaged areas (details here and here).

The last Type C contract to be awarded today, under the same Framework agreement, will add another £157m of public investment and 65,000 premises to the above total – this time focusing upon remote rural Scotland. Several remote islands off Scotland’s west coast will benefit, including thousands of premises across the Outer Hebrides – a chain of over 100 islands where currently just 7% of premises can access gigabit broadband – as well as the isles of Skye, Islay and Tiree.

Rural parts of the Scottish Highlands will also be covered by this boost, such as Applecross, an extremely remote peninsula, and Durness, the most north-westerly village on the UK mainland.

Telecoms Minister, Chris Bryant, said:

“Digital exclusion for people living and working in hard-to-reach areas across Scotland can be a huge obstacle to living a better and healthier life. Elderly and vulnerable people could miss out on the best treatment options in North Ayrshire, while budding entrepreneurs could be held back from their dream of running a successful business in Moray.

With our recent Digital Inclusion Action Plan, we have pledged to take everyone along with us in the digital revolution so that we don’t entrench existing inequalities as technological progress races ahead. This huge UK Government investment is a commitment to using technology to make lives in Scotland better as well as turbocharging local economies to deliver on our growth mission under the Government’s Plan for Change.”

Openreach Deputy CEO, Katie Milligan, said:

“Full fibre is the UK’s most reliable broadband technology, and more than half of Scotland’s homes can already order it thanks to Openreach. But we believe everyone deserves access to fast, reliable connections, so we’re proud to be helping extend access to communities that would otherwise be left behind. Our new network’s a catalyst for growth and jobs, with experts predicting it’ll bring a £4.4 billion boost to the Scottish economy and a raft of social and environmental benefits. We’re confident we’ll reach as many as 30 million UK premises by 2030, assuming the right economic conditions exist.”

Richard Lochhead, Scottish Government Business Minister, said:

“This new contract brings even more investment to Scotland and we are committed to working with the UK Government and Openreach to drive efficiencies across both the R100 and Project Gigabit programmes and maximise gigabit coverage.

Through the Digital Scotland Superfast Broadband (DSSB) programme and our ongoing efforts with R100, over one million faster broadband connections have been delivered across Scotland through public investment – developing infrastructure, knowledge and experience that will be essential in ensuring the success of Project Gigabit in Scotland.”

The areas covered by this Type C contract typically reflect locations where no or no appropriate market interest had previously been expressed before to the Government’s umbrella BDUK agency, or areas that have been descoped or terminated from a prior plan.

Areas like the ones above are often skipped due to being too expensive (difficult) for smaller suppliers, which is why Openreach was favoured to scoop them up and ultimate secured the related framework. All the other Project Gigabit contracts have gone to smaller alternative networks (altnets).

The new contract award also complements GoFibre’s recent success in securing the smaller £26.2m (state aid) Project Gigabit contract for the Scottish Borders and East Lothian regions, which will see them reach an additional 11,000 premises across hard-to-reach rural areas (here). More contracts are also expected to be signed later this year for Orkney, Shetland and across the East of Scotland, although these could just as easily go to different network operators.

The work is designed to complement the Scottish Government’s own £600m R100 programme, which is separately working with Openreach to reach another 113,000 premises in hard-to-reach rural locations by 2028 (the vast majority of this will get FTTP).

In that sense, the Project Gigabit contracts for Scotland should be seen as the successor to the R100 project, although the new contract doesn’t clarify how long it will take to reach the stated 65,000 premises (note: this is down from the 76,400 that was originally being targeted under call off 6).