CityFibre lands latest Project Gigabit contract

Just as it was offering a firm “no comment” on reports that it may be the target of a takeover bid by Virgin Media O2, the UK’s leading independent broadband network provider, CityFibre, has revealed it has been awarded a major contract under the UK government’s £5bn Project Gigabit programme, to subsidise roll-out of “gigabit capable” infrastructure to rural properties that would otherwise be excluded from commercial projects.

Project Gigabit was put in place in 2021 to accelerate the UK’s recovery from Covid-19, fire-up high-growth sectors such as tech and the creative industries, and level-up the country, spreading wealth and creating jobs across Britain. At launch, the UK government said the projects it funds will prioritise areas that currently have slow connections and would otherwise have been left behind in broadband companies’ plans.

The delivery plan for Project Gigabit is a response by the UK government to its public consultation, Planning for gigabit delivery in 2021, which sought views on how to spend its £5bn funding commitment for gigabit broadband in hard-to-reach areas, complementing industry investment from the likes of Openreach and Virgin Media to ensure these harder-to-reach areas benefit from the same gigabit broadband as the rest of the country.

By the end of 2025, the government is aiming for 85% of the UK to have gigabit-capable connectivity, and then nationwide coverage by 2030.

As the drive to deliver gigabit-capable connections intensifies, over recent months, several multi-million pound local and regional Project Gigabit contracts have been awarded, covering locations including Cumbria, North Dorset, rural Teesdale, North Northumberland and, in January 2023, Cornwall. Areas including Hampshire, Shropshire, Norfolk and Suffolk are all in line for contract awards by summer 2023.

The £69m contract awarded to CityFibre will subsidise a £122m roll-out of wholesale full-fibre to up to 45,000 rural homes and business in Cambridgeshire. The remaining £53m will be funded by an additional private investment from the broadband company.

The award triggers an evolution of CityFibre’s strategy, expanding and densifying its existing footprint alongside the Project Gigabit programme. This will see CityFibre now extend its roll-out to an additional 170,000 homes across Cambridgeshire. Of the 215,000 homes addressed by the contract award (45,000) and CityFibre’s extended commercial project, 67% have no access to Virgin Media’s networks and 75% are excluded from BT Openreach’s announced FTTP roll-out.

CityFibre has already committed approximately £100m to reach 150,000 homes in the county, and combined with its new commitments, the company will ultimately serve more than 365,000, with what it said will be by far the densest full-fibre footprint in the area.

As the Project Gigabit-subsidised premises are not addressed by any commercial build plans, CityFibre said its roll-out will be the only gigabit-capable network built in the target area, providing what it claimed will be a “highly attractive” footprint to its internet service provider customers. Detailed planning in Cambridgeshire has already begun, and the first Project Gigabit connections are expected in early 2024.

“We’re delighted that CityFibre has been selected by the government as a delivery partner in its Project Gigabit programme,” said CityFibre CEO Greg Mesch. “Participation in the programme is core to our strategy and to our ISP customers, and we are already optimising our organisation and supply chain to maximise the opportunity.

“We look forward to a long and effective partnership in this exciting programme, which supports not only rural connectivity, but a healthy competitive market for the long-term, benefiting consumers and business nationwide.”

UK digital infrastructure minister Julia Lopez said: “Thanks to our record-breaking roll-out of Project Gigabit, rural homes and businesses across Cambridgeshire can be confident they won’t be left behind in the upgrade to top-of-the-range gigabit broadband.

“This landmark deal with CityFibre will help [ensure] the county’s pioneering science and tech industries can unleash their full potential with lightning-quick connectivity, whether in the city or the countryside.”