Winter 2023 Update on Project Gigabit UK Broadband Rollout

The Building Digital UK team has today published their latest quarterly Winter 2023 update on the Government’s £5bn rural Project Gigabit broadband rollout scheme, which has so far awarded six contracts – worth £164.8m – and launched 14 further procurements with a combined estimated value of £906.7m.

The project itself aims to extend networks capable of delivering 1000Mbps (1Gbps) download speeds to “at least” 85% of UK premises by the end of 2025 and then “nationwide” coverage (c.99%) by around 2030 (here). The funding released for this will depend upon how the industry responds. So far only £1.2bn has been released from the budget up until 2024, but more is expected to be unlocked as the industry responds.

At present around 73% of UK premises can already access a gigabit-capable network (c.45% via just FTTP) and that’s mostly thanks to Virgin Media’s (VMO2) upgrade of their existing HFC networks (here). But it’s anticipated that commercial builds alone will push gigabit coverage up to over 80% by around the end of 2025 (mostly in urban areas), while Ofcom predicts overall gigabit coverage will hit c. 92% in March 2025 (here).

Project Gigabit is thus designed to focus on improving connectivity for those rural and semi-rural areas in the final 20% (5-6 million premises). This consists of several support schemes, including gigabit vouchers (£210m), funding to extend Dark Fibre around the public sector (£110m) and gap-funded deployments with suppliers (rest of the funding) – better known as the Gigabit Infrastructure Subsidy (GIS) programme.

Today’s article is focused upon the GIS programme and related procurement work, which sees ISPs bidding through a new Dynamic Purchasing System (DPS) to extend their networks across disadvantaged parts of the UK.

What’s New in the Winter 2023 Update

Since the last update, BDUK has followed their initial contract awards by signing two new contracts for Central Cornwall (Lot 32.03) and South West Cornwall (Lot 32.02) – worth a combined £36 million – with alternative network provider Wildanet (here). The rollout is expected to help upgrade more than 19,250 hard-to-reach homes and businesses in the region.

The combined value of all the contracts signed so far comes to around £164.8m in public investment and will upgrade nearly 92,950 premises (c.£1,773 per premises passed). As it stands, the total value of Project Gigabit’s procurements launched to date is around £1bn, which could see up to 730,000 extra premises being passed by a gigabit-capable network.

In the “next few months“, BDUK added that we will witness a further acceleration of the rollout of Project Gigabit, with contracts set to be awarded covering locations across Cambridgeshire, Norfolk, Suffolk, the New Forest and Shropshire, and spades in the ground in many of the places covered by contracts signed last year.

However, so far all of this has been in England, while the devolved countries of Wales, Scotland and Northern Ireland are still in the preparation stage. But we do get a good idea of the next steps for these areas.

Status of Devolved Countries

➤ In Wales, initial market engagement has taken place with suppliers and final intervention areas are now being developed with the aim of launching procurements by the summer.

➤ The Open Market Review for Northern Ireland launched on 8 December and closed on 27 January. The responses are currently being evaluated, with a Public Review expected to launch in April and procurement expected to start in the autumn.

➤ In Scotland, a Public Review is scheduled to launch in March, with procurements expected to follow later this year. The Public Review responses to the proposed local procurement in the Inverness area have been evaluated and assured by Highlands and Islands Enterprise (HIE), and soft market testing is now underway with interested suppliers.

Elsewhere, BDUK has partnered with National Parks England, Openreach (BT) and wayleaves (land access agreements) firm Trenches Law to sign an accord which will enable efficient gigabit-capable rollout while protecting these beautiful landscapes (i.e. reducing barriers to broadband deployment in England’s 10 national parks).

Finally, BDUK has identified the first areas for inclusion into a possible Cross-Regional Supplier Framework, which are listed below (see tender). The idea of this is to appoint a supplier to target premises (i.e. subsidise the design, build and operation of a new gigabit network) in areas where no or no appropriate market interest has been expressed before, or areas that have been descoped or terminated from a prior plan.

• North Wiltshire and South Gloucestershire (Lot 30C)
• West and Mid-Surrey (Lot 22C)
• Staffordshire (Lot 19C)
• West Berkshire (Lot 13C)
• Cornwall & Isles of Scilly (Lot 32C)
• Hertfordshire (Lot 26C)
• North West and Mid Wales (Lot 43C)
• West and North Devon (Lot 6C)

Otherwise, you can see a summary of the wider contract progress below.

Live GIS Contracts (Signed)

Take note that, once a contract has been signed, it often takes network operators several months of engineering surveys before they can begin to start a rollout. Likewise, the detailed rollout plan for these first contracts won’t be known until those surveys have been completed. Furthermore, the contract values above are only referencing public investment, but it’s hoped that suppliers may also contribute some of their own private investment.

On top of the already agreed contracts, Project Gigabit also has a growing number of local and regional deals in the procurement phase for other parts of the UK (see below) and will be awarding contracts for these over the coming months and years. The dates and figures mentioned below are tentative estimates (subject to change) and will remain that way until after the contracts have been awarded.

Bidders on the related LOTS will be required to ensure that their networks and infrastructure are available for use by other ISPs via wholesale (open access). Various operators, both big and small (e.g. Openreach, Cityfibre, Fibrus, Gigaclear, Virgin Media [VMO2] etc.), are expected to take part and areas with sub-30Mbps speeds are being prioritised, albeit NOT to the exclusion of all else.

Alongside all this, the government and local bodies are also conducting various Public Reviews and Open Market Reviews (OMR), which is the process they use when trying to identify existing commercial coverage of gigabit-capable networks and any planned coverage over the next c.3 years. By doing that, they can more easily target their support toward areas where commercial projects will not go (i.e. the intervention area).

Live GIS Procurements

Finally, BDUK has a long list of future procurements in their pipeline (see below). But some projects (e.g. Scotland and Wales) haven’t even got this far yet. The following pipeline thus represents an indicative forward view of commercial activity to be undertaken by the programme. Some of the information provided is based on modelled data that will be superseded.

Future GIS Procurements

Michelle Donelan MP, DSIT Secretary of State, said:

“This latest Building Digital UK report presents a milestone achievement, with £1 billion of Project Gigabit’s funding now available to suppliers. To have pledged such a significant sum only two years since launch is a clear signal of how far – and how fast – we have come in boosting gigabit-capable broadband across the UK.”

Sadly, another quarter has passed without BDUK launching a centralised website for clearly communicating their progress on each contract / area, which is something that we’ve previously been told was on the cards. The quarterly updates they issue are useful, but they’re simply too tedious for regular people to find and follow, unless you’re already familiar with the programme. A clean, clear and simple front-end is still needed.

At the same time, it’s still taking far too long to get all of these contracts into procurement, let alone award them. The new and more automated DPS system was supposed to make all of this faster and more efficient than just handing the funding to local authorities, but it’s difficult to see the benefits of that when so many areas have yet to enter procurement and some won’t even see contracts awarded until mid-2024 or later.

We should remind readers that this rollout is NOT an automatic upgrade, thus you will still need to order the service from a supporting ISP (1Gbps is the target speed, but slower and cheaper options will also exist). Likewise, no specific network coverage checkers will be available for areas in this programme, at least not until AFTER the contracts have been awarded and the necessary engineering surveys are completed.

The focus on “gigabit” speeds also overlooks the fact that this largely relates to download performance, while BDUK’s technical definition for the project appears to suggest that a minimum speed of 200Mbps would be acceptable, when only looking at the upstream side (here). This is understandable, as not all gigabit networks today are actually setup to deliver true symmetric gigabit speeds, even though some may advertise them.

Lest we forget that there are a lot of real-world reasons why consumers buying a 1Gbps package might not actually be able to achieve the top speed, due to certain realities (Why Buying Gigabit Broadband Doesn’t Always Deliver 1Gbps).

Finally, we should add that the Government has previously warned that those in the final 1% may still be “prohibitively expensive to reach“, although they’ve recently clarified that less than 0.3% of the country (i.e. under 100,000 premises) are likely to fall into this category (roughly the same gap that the 10Mbps USO has struggled to fill). Solutions for those in the final 0.3% of “Very Hard to Reach” areas are still being tested.

Project Gigabit Winter 2023 Update
https://www.gov.uk/../project-gigabit-delivery-plan-winter-update-2023