Freedom Fibre Scales Back North Shropshire Project Gigabit Broadband Contract UPDATE
The Government’s Building Digital UK (BDUK) agency has just announced that alternative network provider Freedom Fibre has had to scale back their £24m (state aid) Project Gigabit broadband roll-out contract for North Shropshire (LOT 25.02 in England), which originally aimed to cover “around” 12,000 hard-to-reach rural homes (here).
The provider, which only recently dropped out of their other £43m (state aid) Project Gigabit broadband roll-out contract for Cheshire in order to “focus on delivering high-quality fibre infrastructure in our priority areas” (here), is said to have informed BDUK that they had already completed the build to 2,500 premises in North Shropshire, but would now only aim to reach a further 1,000 by the end of this month.
The network operator has so far deployed a 10Gbps capable Fibre-to-the-Premises (FTTP) broadband network to cover 350,000 premises across parts of England and Wales (part of an aspiration to reach 1 million premises by 2030), mostly via commercial investment.
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However, smaller altnets are currently known to be under a lot of strain (e.g. high interest rates, rising build costs and competition) and Freedom Fibre recently suffered some related job losses (here), which occurred as part of a “strategic reorganisation” of the business and greater focus on future growth via consolidation (here). We suspect today’s news may form part of that same dynamic.
BDUK Statement
In 2023, Freedom Fibre was awarded a contract to roll out gigabit-capable broadband to 12,000 premises in North Shropshire.
Due to changes in the external market, Freedom Fibre is no longer able to complete the contract in full. Freedom Fibre has already completed the build to 2,500 premises and aims to reach a further 1,000 by the end of this month.
BDUK and Freedom Fibre have mutually agreed to descope the remaining 8,500 premises from this contract. 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.
The development follows after several other network operators similarly dropped out of or scaled-back their build plans under Project Gigabit, including Voneus for Mid West Shropshire (here) and FullFibre Limited for the Derbyshire Peak District and Herefordshire (here).
The service that Freedom Fibre provides is typically offered via a variety of supporting ISPs, such as TalkTalk, iDNET, Aquiss, Zen Internet, Home Telecom and more. The company’s most recent accounts (here) revealed that their revenues grew by 114% to total £623,185 in 2023 (up from £291k in 2022) on capital expenditure of £30.69m (up by 50% from £20.49m) and a total loss for the year of -£12.65m (vs -£7m).
UPDATE 10:47am
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We’ve had a comment from FF.
A Spokesperson for Freedom Fibre said:
“Following a mutual agreement with BDUK, the remaining 8,500 premises will be descoped from Freedom Fibre’s North Shropshire Gigabit contract. BDUK is actively progressing alternative arrangements with other suppliers to ensure continued progress in connecting the remaining premises. Freedom Fibre is supporting this transition and is working collaboratively to make existing infrastructure available, where feasible, to help accelerate future delivery.”
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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It does not bode well for the future of the BDUK scheme.
I wonder what proportion of that GBP 24mn will be returned to the scheme.
It will not just be the AltNets experiencing difficulties with these BDUK roll-outs if the customer take-up remains very low. The whole scheme is perhaps an aspiration too far removed from the real world.
BDUK grant monies are only paid out on milestones passed. So they’ll get a pro rata payment on completion.
@HR2Res:
Thanks for the info.
So, potentially, they are out of pocket for any supporting assets they have already installed but which will now remain underused.
FF have surely got to be seen as a potential consolidation target either by CityFibre or Netomnia.
It was said by former Fibrenation staff that FF would last 4-5 years, build just enough to be a viable M&A target and then be sold.
Just depends how much they want for the network and how much is already in overbuilt locatikns
The taxpayer should have some clawback where firms cream off the easiest quarter of the contract, bank the subsidy and then walk away from the rest.
Do you think that’s likely to result in more or less hard to reach properties getting modern broadband? “We’ll fine you if you don’t finish” will just result in ISPs sitting on their hands.
It doesn’t help the hardest to reach places if the cheapest and most profitable quarter of the cohort is creamed off.
So will the government get any money back from them ?
What money? They get paid when they finish.
Another instance of de-scoping and reduction in intervention within Project Gigabit – there’s been a fair few of these now. With the understanding that Openreach have been awarded all Type C lots now across the UK, I am assuming this means there will be more money directed to Openreach, who now have a bigger job to do. It’s also a bit concerning that the “1%” or “Very-Hard-to-Reach” who will never get gigabit capable broadband, seems to be growing when operators actually get boots on the ground to assess the work, and there still is no policy from BDUK or DSIT as to what will be put in place to support these premises.
I do not think the BDUK scheme can continue in its current form unless the government is prepared to provide a higher-level funding for non-commercial roll-outs. The scheme will be further undermined if Reeves does indeed impose more tax increases on businesses in the Autumn Budget.