{"id":39023,"date":"2024-08-13T00:01:37","date_gmt":"2024-08-12T23:01:37","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=39023"},"modified":"2024-08-13T07:12:39","modified_gmt":"2024-08-13T06:12:39","slug":"openreach-to-win-uk-project-gigabit-broadband-contracts-and-help-312k-premises","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2024\/08\/openreach-to-win-uk-project-gigabit-broadband-contracts-and-help-312k-premises.html","title":{"rendered":"Openreach Win UK Project Gigabit Broadband Contracts and Help 312k Premises"},"content":{"rendered":"

The Government claims to have kicked off a “renewed push<\/em>” today to “reach full gigabit [broadband] coverage by 2030<\/em>“, which they’ve done by announcing that Openreach<\/a> (BT<\/a>) has secured several contracts under the \u00a35bn Project Gigabit<\/a> scheme. This could eventually be worth up to \u00a3800m (state aid) and may upgrade 312,000 premises in remote rural areas of Scotland, England and Wales.<\/p>\n

Project Gigabit has been running for the past few years and aims to extend networks capable of delivering download speeds of 1000Mbps+ (1Gbps) and uploads of 200Mbps+ to 85% or more of UK premises by the end of 2025 (it’s currently c.84%<\/a>), before rising to \u201cnationwide<\/em>\u201d coverage (c.99%) by around 2030 (here<\/a>). But commercial builds are delivering most of this, while public money remains focused on the final 10-20% of poorly served premises.<\/p>\n

NOTE:<\/strong> Ofcom<\/a> predicts that gigabit coverage will reach around 87-91% of premises by May 2025 and then 90-94% by May 2026 (here<\/a>).<\/div>\n

Most of the related contracts (Type A – Local scale and Type B – Regional scale) under Project Gigabit’s Gigabit Infrastructure Subsidy<\/strong> (GIS) scheme have already been awarded for much of England. All of these have gone to smaller alternative networks (altnets) like Cityfibre<\/a>, GoFibre<\/a>, Wessex Internet<\/a>, Gigaclear<\/a> and various other providers.<\/p>\n

However, the project has also had to create a number of Cross-Regional (Type C)<\/strong> procurements, which were focused on areas where no or no appropriate market interest had been expressed before to the Government’s umbrella Building Digital UK<\/a> (BDUK) agency, or areas that have been descoped or terminated from a prior plan.<\/p>\n

Such areas are often skipped due to being too expensive (difficult) for smaller suppliers to tackle. Due to this Type C’s can only really be delivered by operators of some scale and are intended to cover a much wider area. Back in May 2024 we revealed that Openreach<\/a> (BT<\/a>) had been named as the preferred bidder for all of these (here<\/a>) and thus today’s announcement is the logical outcome of that.<\/p>\n

What’s been awarded?<\/strong><\/span><\/h3>\n

The official announcement is a bit generalised, but it states that “up to<\/em>” \u00a3800 million<\/strong> in government investment will be made available to modernise broadband infrastructure for 312,000 premises<\/strong> in rural areas of England, Scotland and Wales as part of the new deal with Openreach<\/a>. Just to be clear, this figure was first stated for Type C procurements back in 2022 (here<\/a>) and forms part of the overall budget for Project Gigabit.<\/p>\n

However, it’s important to stress that Openreach hasn’t yet won all of the Type C procurements (it’s just a matter of time), thus the figure of 312,000 premises and \u00a3800m being headline today is more a reflection of what they’re expected to secure over the coming months. Instead, today’s announcement only confirms that Openreach have secured the first two out of six Type C contracts.<\/p>\n

The deal today means that premises in remote areas of Britain, such as the South Wales Valleys, Exmoor National Park and the Forest of Bowland will finally gain access to gigabit broadband. This is also the first time that Wales, the nation with the lowest percentage of gigabit coverage, will benefit from this programme.<\/p>\n

Today’s Contract Awards for Openreach<\/strong><\/span><\/p>\n

Type C (Call Off 1):<\/strong> Lancashire (Lot 9C), North Wiltshire and South Gloucestershire (Lot 30C) , West and Mid -Surrey (Lot 22C), Staffordshire (Lot 19C), West Berkshire (Lot 13C) and Hertfordshire (Lot 26C)
\nPremises: 57,100 * (final contracted 54,300)
\nValue: \u00a3149.7m<\/p>\n

Type C (Call Off 2):<\/strong> West and North Devon (Lot 6C) , North West Wales, Mid Wales (Lot 43C) and South East Wales (Lot 44C)
\nPremises: 47,100 * (final contracted 42,200)
\nValue: \u00a3139.1m<\/p>\n

* The figures above are from Project Gigabit’s April 2024 estimate and thus the final contract details are slightly different.<\/em><\/p><\/blockquote>\n

According to today’s announcement, both contracts – worth \u00a3288 million<\/strong> – have been signed with Openreach and aim to connect approximately 96,600 homes and businesses<\/strong> in England and, for the first time, Wales. This is slightly less than the originally forecast total of both contracts (c.104,000 premises). In any case, the first premises under these contracts are anticipated to have access to gigabit-capable broadband in “early 2025<\/em>“.<\/p>\n

Take note that Call Off 2 will benefit parts of the following constituencies in Wales: Arfon, Clwyd South, Dwyfor Meirionnydd, Ceredigion, Montgomeryshire, Brecon and Radnorshire, Monmouth, Torfaen, Newport West, Caerphilly, Blaenau Gwent, Cardiff North, Cardiff Central, Cardiff West, Cardiff South and Penarth, Merthyr Tydfil and Rhymney, Ogmore, Islwyn, Pontypridd, Cynon Valley, Rhondda, Vale of Glamorgan, Bridgend, Neath, Aberavon, Swansea East, Swansea West, Gower.<\/p>\n

Peter Kyle, Secretary of State for DSIT, said:<\/strong><\/p>\n

\u201cOver the past decade, the UK\u2019s broadband rollout has clearly not happened fast enough and has overlooked too many areas, especially in Scotland and Wales. Robust digital infrastructure is essential for growth, productivity and competitiveness and this shortfall not only poses risks to our economic stability, but also entrenches existing inequalities across the country.<\/p>\n

We are fixing this by delivering for hundreds of thousands of homes and businesses up and down the country, focusing on the areas that were not prioritised by the previous government, such as Wales.<\/p>\n

Today marks a significant milestone in delivering on our promise to redouble our efforts to achieve full gigabit coverage by 2030 and lay the foundations for a more inclusive, dynamic and prosperous future for all citizens.\u201d<\/p><\/blockquote>\n

Clive Selley, CEO of Openreach, said:<\/strong><\/p>\n

\u201cResearch shows that full fibre provides a host of economic, social and environmental benefits \u2013 and I believe we\u2019re the best in the business at delivering it. I\u2019m proud we\u2019ve been chosen, through a fiercely competitive process, and we\u2019re already cracking on with the job.<\/p>\n

This is a British infrastructure success story. Our network already reaches more than 15 million urban and rural premises and, wherever we build, we bring the widest choice of providers for customers. I\u2019m confident we can reach as many as 30 million homes by the end of the decade if the conditions remain supportive.\u201d<\/p><\/blockquote>\n

Jo Stevens, Secretary of State for Wales, said:<\/strong><\/p>\n

\u201cAt the moment we have too many people, especially in the more remote areas, of Wales who can\u2019t properly access the online world, and I\u2019m pleased that thanks to this substantial investment from the UK Government work, on fixing that is starting now.\u201d<\/p><\/blockquote>\n

Talks are now said to be “underway with Openreach to agree further contracts<\/em>” to benefit around 215,800 more premises across England, Scotland and Wales, with more announcements expected in the “coming months<\/em>“. This reflects the following ongoing Type C procurements.<\/p>\n

Remaining Type C Procurements<\/strong><\/span><\/p>\n

Type C (Call Off 3): East and South Shropshire, North Herefordshire, North Wales, and South West Wales<\/strong>
\nEst. Premises: 49,600
\nEst. Value: \u00a3136.1m<\/p>\n

Type C (Call Off 4): Mid Devon, North Somerset, and South Devon<\/strong>
\nEst. Premises: 23,300
\nEst. Value: \u00a369.8m<\/p>\n

Type C (Call Off 5): Essex and North East England<\/strong>
\nEst. Premises: 22,100
\nEst. Value: \u00a361.3m<\/p>\n

Type C (Call Off 6): Central and North Scotland<\/strong>
\nEst. Premises: 96,900
\nEst. Value: \u00a3207.4m<\/p><\/blockquote>\n

In terms of Wales specifically, the government says this means that – once all the related Type C contracts have been awarded – a total of around \u00a3170m of public money will go toward extending gigabit-capable broadband to benefit around 70,000 hard-to-reach Welsh homes and businesses. But the exact details of Call Off 3 – 6 won’t be known until they’ve been officially awarded, which is expected by around the end of this year.<\/p>\n

The announcement builds on work already underway through other Project Gigabit contracts to build faster networks for up to 910,000 hard-to-reach premises across England. Dozens of contracts representing more than \u00a31.9bn worth of public investment have now been signed with 11 suppliers to deliver the upgrades.<\/p>\n

However, the new Government is perhaps being a bit disingenuous in parts of this announcement, such as by claiming that this is all part of Labour’s pre-election commitment to “make a renewed push to fulfil the ambition of full gigabit and national 5G<\/a> coverage by 2030<\/em>” (here<\/a>). But much as we said above, there’s nothing particularly new about today’s announcement, which has been in the pipeline since well before the election.<\/p>\n

UPDATE 7:03am<\/strong><\/p>\n

We’ve updated some of the totals with the final contracted figures for call-off 1 and 2 above. In addition, Openreach successfully bid for these to adopt the single supplier framework<\/strong> (here<\/a>), which means any future fibre build delivered through the framework doesn\u2019t have to go through another competitive process each time (i.e. later extension projects and infill in these areas will be easier to agree). You can see a rough image of the related build for each area below:<\/p>\n