{"id":36989,"date":"2024-01-29T12:52:10","date_gmt":"2024-01-29T12:52:10","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=36989"},"modified":"2024-01-30T08:10:38","modified_gmt":"2024-01-30T08:10:38","slug":"delays-as-cityfibre-suspends-more-uk-fttp-broadband-builds","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/01\/delays-as-cityfibre-suspends-more-uk-fttp-broadband-builds.html","title":{"rendered":"Delays as CityFibre Suspends More UK FTTP Broadband Builds UPDATE3"},"content":{"rendered":"

As fibre optic network operator CityFibre<\/a> continues its drive to reduce costs and boost coverage growth, such as via mergers and acquisitions (here<\/a>), the news starting to reach us today is that they’ve also taken the decision to “pause<\/em>” more of their full fibre (FTTP<\/a>) broadband contracts with UK build partners (contractors).<\/p>\n

So far the operator has already expanded their 10Gbps capable Fibre-to-the-Premises<\/strong> (FTTP<\/a>) 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.\u00a32.4bn in equity and c.\u00a34.9bn debt) \u2013 across over 285 cities, towns and villages (c.30% of the UK) \u2013 by the end of 2025 (here<\/a>). The network currently has 337,000 live customer connections.<\/p>\n

NOTE:<\/strong> CityFibre<\/a> is owned by Antin Infrastructure Partners, Goldman Sachs Asset Management, Mubadala Investment Company and Interogo Holding. Some 41 broadband ISPs (e.g. TalkTalk<\/a>, Vodafone<\/a>, Zen Internet<\/a> etc.) are selling packages over their network.<\/div>\n

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<\/a>, here<\/a> and here<\/a>).<\/p>\n

The news today is that CityFibre<\/a> recently instructed another batch of contractors to “pause<\/em>” builds in various locations. A Construction Enquirer<\/a> 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).<\/p>\n

A CityFibre Spokesperson said:<\/strong><\/p>\n

\u201cGiven 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\u2019s \u2018Project Gigabit\u2019 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.\u201d<\/p><\/blockquote>\n

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.<\/p>\n

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).<\/p>\n

The operator also aspires to secure more contracts under the government’s Project Gigabit<\/strong> broadband rollout scheme and these are likely to be on the larger ‘Regional<\/em>‘ side (like those previously won for Hampshire, Norfolk, Suffolk and Cambridgeshire – here<\/a> and here<\/a>). 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.<\/p>\n

As expressed in this morning’s separate, albeit related, article (here<\/a>) – 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.<\/p>\n

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.<\/p>\n

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<\/a> to the scale we see today.<\/p>\n

UPDATE 1:46pm<\/strong><\/p>\n

We’ve had an additional comment from Cityfibre.<\/p>\n

A Spokesperson for CityFibre:<\/strong><\/p>\n

“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 \u2018Project Gigabit\u2019 and commercial expansion around it.<\/p>\n

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.”<\/p><\/blockquote>\n

UPDATE 3:05pm<\/strong><\/p>\n

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.<\/p>\n

UPDATE 30th Jan 2024 @ 6:49am<\/strong><\/p>\n

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<\/em>“. 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.<\/p>\n

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.<\/p>\n

Part of the problem is that the operator’s build status for various locations is currently best described as being “fluid<\/em>” and apparently this isn’t something that always fits a neat definition. So, while CityFibre say that Leeds might not have been “paused<\/em>” or stopped, they have since acknowledged that builds still underway by OCU may be “slowed down<\/em>” (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.<\/p>\n

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.<\/p>\n","protected":false},"excerpt":{"rendered":"

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).<\/p>\n","protected":false},"author":1,"featured_media":33142,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[418,56],"class_list":["post-36989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-cityfibre","tag-fttp"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/111839335838910345","error":""},"yoast_head":"\nDelays as CityFibre Suspends More UK FTTP Broadband Builds UPDATE3 - ISPreview UK<\/title>\n<meta name=\"description\" content=\"As fibre optic network operator CityFibre continues its drive to reduce costs and boost coverage growth, such as via mergers and acquisitions (here), the\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2024\/01\/delays-as-cityfibre-suspends-more-uk-fttp-broadband-builds.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Delays as CityFibre Suspends More UK FTTP Broadband Builds UPDATE3 - 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