Fibrus Pulls Out of North East Project Gigabit Broadband Rollout UPDATE

Infracapital-backed UK broadband ISP Fibrus, which is building a 10Gbps capable Fibre-to-the-Premises (FTTP) network across Northern Ireland and North England, has confirmed to ISPreview that they’ve had to pull out of the state aid supported Project Gigabit contract for the North East of England. But existing builds will continue.

Just to recap. The government’s regional Type B Project Gigabit contract for North East England (Lot 4) had been stuck, rather unusually, at the contract award stage for several months. The proposed contract was originally due to be awarded in May 2023 and had been valued at £82.7m to help extend gigabit broadband coverage to 53,200 of the hardest to reach premises, which made it one of the largest build contracts under the scheme.

The last update from the related Building Digital UK (BDUK) agency merely stated that they were still “working on the finalisation of the contract” (i.e. the contract had technically been awarded, but for some reason it was taking longer than usual to sign off the details). Suffice to say that this had become the source of much speculation, which we can now hopefully put to rest.

ISPreview recently learnt that the contract was in the process of being awarded to Fibrus. But perhaps understandably, given the current state of the market and rising build costs (inflation, leases, suppliers etc.), the operator has now taken the prudent decision to pull out and focus on their existing builds in Northern Ireland and Cumbria (both commercial and state aid supported ones).

Fibrus’ full fibre network currently covers 300,000 premises (273,000 RFS) and is home to 50,000 customers. But they aim to cover 1 million premises over the next 3 years (by Q1 2026) – reflecting around 450,000 in N.Ireland (c. 50% of homes in the region) and the rest from England, and potentially Scotland too. A total of 400,000 UK premises are currently expected to be covered by March 2024 (i.e. 150,000 in a single year).

Dominic Kearns, Chief Executive of Fibrus, said:

“Given the state and cost of the capital markets we have taken the decision to focus our equity and debt funding in our home markets of NI and Cumbria, hence our withdrawal from the NE Gigabit process. Our business remains funded for all our existing programmes and when the markets stabilise again, we will seek out further growth opportunities.

For the moment, we are committed to delivering our network for those most in need across rural Cumbria and Northern Ireland, including our two government subsidised contracts. Pleasingly, our customer take-up and brand continue to grow rapidly across our Cumbria and Northern Ireland, and we plan to focus on accelerating it.”

The situation naturally leaves the related procurement process for the North East in a bit of a bind, since Project Gigabit will now have to either restart the procurement process or take a different approach entirely (much may depend upon how much interest the original procurement received from rival suppliers). In either case, it means more delays until a new supplier can be found and contracted.

A DSIT spokesperson said:

“We are working with other suppliers to identify alternative routes for connecting communities in the North East. Our priority remains rolling out gigabit broadband across the North East as soon as possible.”

One problem for the BDUK agency is that today’s market is much less stable and certain than it was when the procurement process first started. Many network operators and investors from across the sector have this year slowed their builds, cut jobs and switched strategies to focus on take-up or more lucrative deployments, which means a smaller pool of suppliers looking to bid on Project Gigabit.

UPDATE 2:10pm

We’ve just had it confirmed that the company’s plans to build commercially in the North East have also been paused in line with the decision on the Gigabit programme. This is arguably a much more significant development, since it was only in May 2023 that Fibrus announced they were targeting 125,000 premises across 40 locations in the North East of England for this (here).

The planned deployment mostly reflected towns and villages in Northumberland and Durham, including Blyth, Ashington, Newton Aycliffe and Morpeth.