This month marks one year since the launch of Project Gigabit. Comms Business reflects on the progress made and what lies on the path ahead.
Project Gigabit is the UK government’s £5 billion infrastructure plan to provide homes and businesses across the UK with next generation gigabit-capable broadband. Launched under the strapline “building fast, reliable broadband for everyone in the UK”, the government aims to give 85 per cent of UK premises access to gigabit-broadband by 2025.
Ofcom’s latest Connected Nations report, published in December 2021, highlighted both the progress made and the scale of the work that remains to be done. Gigabit-capable broadband means an internet connection that can provide download speeds of 1Gbit/s or higher. This can be delivered over full fibre networks and the latest versions of coaxial cable networks.
The Connected Nations report stated that Gigabit speeds are available to 13.7 million premises, or 47 per cent of the UK. Of those, just over eight million premises (28 per cent) now have access to a full fibre connection – an increase of 10 percentage points or three million premises in the past year.
To put that into context, the previous year’s report found that gigabit-capable broadband was available to 7.9 million premises (or 27 per cent of the UK), with full fibre available in 5.1 million premises (or 18 per cent of the UK). This progress represents the largest year-on-year increase in gigabit-capable coverage that Ofcom has seen so far.
In an effort to move the needle even further, in December the government announced that its broadband delivery body, Building Digital UK, is to become an Executive Agency as part of efforts to ramp up the rollout of gigabit broadband and level up communities across the UK.
Building Digital UK (BDUK) previously sat within the Department for Digital, Culture, Media and Sport (DCMS). While DCMS ministers will retain overall control and responsibility for BDUK and broadband rollout, the new agency will have a new corporate governance structure, including a new board.
The progress made
Dave Hawkins, head of channel sales at Nasstar, highlighted the importance of the core ambitions of the strategy. He said, “Project Gigabit represents a massive investment in the underlying infrastructure of our country. This supports the changes in how we are all working post-pandemic in a more hybrid fashion and the need for faster connectivity to our homes as well as our businesses. It also supports the need for fibre and next-generation connectivity in line with the Openreach switch off of the PSTN network in 2025.”
Hawkins added that, whilst the roll out has increased over the last year, “we are still way off passing the homes and business address required to call Project Gigabit a success”.
That chimed with the view of Simon Willmott, director of wholesale business development at Neos Networks. He explained, “The progress the project has made means that now half of UK homes and businesses have access to futureproof gigabit capable connectivity. Key players have expanded their networks to deploy reliable full fibre coverage to cities and districts across the country. However, there’s still a way to go when it comes to the most rural areas, with the government rightly dedicating £5bn to targeting non-commercial areas.”
Willmott spotlighted the role his company is playing in widening access to gigabit-capable connctions. He said, “Neos Networks has been busy building out its network, unbundling 550 BT exchanges to date and deploying a full fibre, last mile, metro network expansion programme across four key UK cities. This development and growth will allow alternative network providers, or AltNets, to take advantage of core networking routes to deliver gigabit capabilities, even in the most rural of areas.”
Paul Heritage-Redpath, head of products, CityFibre, welcomed the progress made since the launch of Project Gigabit but highlighted the importance of distinguishing between gigabit-capable and full fibre. He said, “In our view, full fibre is essential to the successful deployment of gigabit-capable services as it’s the only truly future-proof solution and there has been substantial progress made over the last year.”
Heritage-Redpath pointed to Ofcom’s latest Connected Nations report and said “it’s clear to see progress is happening at pace”. He added, “Here at CityFibre, we have now passed over 1 million homes and we are now the largest provider of full fibre lines in more than 25 towns and cities in the UK and on target to reach 8 million premises by 2025 across 285 towns and cities, or around one third of the UK.”
Similarly, Ronan Kelly, CTO for the EMEA and APAC regions, ADTRAN, was positive about the direction the UK is taking. He said, “A lot of progress has been made over the last year. There are now over 100 operators building out fibre to the home infrastructure across the UK, [and] we have visibility of around 60 to 65 of these operators of which 80 per cent are our current customers this shows the market is very buoyant and active.
“We also see that a lot of the operators are making it to their next round of funding, so the investor confidence is still very much there within the market which is probably key. With online gaming and video stream demanding more bandwidth with each new release, the demand for gigabit services in only going to increase, leading to a competitive market.
“Gigabit service offerings are now being made available in what we would describe as the elastic spend of households somewhere between £25 and £50 per month on broadband services. Virgin Media announced it is offering one gig service at around the £50 mark, so they’re just about falling into that elastic spend category. That is where it starts to get interesting as we see the democratisation of Gigabit increases across the UK.”
Speeding up delivery
When asked what he makes of the government’s current strategy, Heritage-Redpath, from CityFibre, said the company welcomes the £5 billion committed by Government to fund rollout in the hardest to reach parts of the country which are not commercially viable. He added, “We also welcome BDUK’s commitment to ensuring a competitive bidding process for the identified Lots. This will speed up delivery and deliver better value for money for the public purse.
“We also welcome recent legislation introduced to speed up the process for agreeing wayleaves and sharing historic infrastructure information and look forward to those changes coming into force.”
James Audley, head of wholesale product, marketing and strategy at Virgin Media O2 Business, discussed the significance of the voucher scheme. Under this scheme, the Government is providing up to £210m worth of voucher funding as immediate help for people experiencing slow broadband speeds in rural areas. The vouchers help cover the costs of installing gigabit broadband and are worth up to £1,500 for homes and £3,500 for businesses. He explained, “The Government Project Gigabit voucher scheme has certainly helped bring gigabit speeds to new areas of the UK.”
He added, “Having already upgraded our entire fixed network to gigabit speeds, we plan to contribute even further to the Government’s connectivity targets – upgrading infrastructure in more parts of the country and continuing to expand and bringing greater choice and competition to the areas that need it most.”
Bridging the digital divide
One area that the government has made progress on is tackling the physical barriers to connectivity. Georgina Rudak, head of legal and a solicitor at Trenches Law, explained, “The UK Government clearly has an intention to legislate – which has been evidenced by amendments to the Electronic Communications Code through the Product Security and Telecommunications Infrastructure Bill, which has recently had its second reading. This is pleasing because without this support, the industry could fall short of the 85 per cent gigabit coverage targets by 2025.
“And while we do support the reforms, we also believe there is still a long way to go to ensure all quarters of the UK are hyper-connected. To achieve this, firstly, there needs to be a genuine balance struck between operators and landowners. For example, circa 20 per cent people live in multi-dwelling units and without a wayleave agreement in place, the network simply cannot be upgraded.
“That means that if negotiations stall or agreements aren’t even in place, the digital divide will stretch even further – leaving rural areas in particular completely isolated. Ofcom estimates that gigabit [or ultrafast] broadband was made available to 60 per cent of the UK by the end of 2021, which is a fantastic achievement, but it’s disappointing to see that this equates to circa 50 per cent coverage in urban areas and only 25 per cent coverage in rural communities.
“We’d like to see a greater focus to bring those numbers more in-line with expectations and ensure that even those living in hard-to-reach areas have access to the same broadband speeds as everyone else. So, while there is a wealth of opportunities that we welcome, it’s vital the Government’s strategy ensures that these changes go further to support the roll-out of full fibre broadband in the UK.”
Willmott, from Neos Networks, shared his perspective as a specialist business-only telecoms network provider. He said, “The government’s current strategy is great in principle, with fibre infrastructure playing a key part in the UK’s levelling up agenda and a dedicated fund to make that happen. However, the reality is that although we’ve seen a rise in AltNets securing private and government funding, it’s still not a level playing field.
“For example, in 2021, a ruling by Ofcom meant that Openreach would be free from further wholesale pricing regulation. This has seen Openreach add a requirement for AltNets to self-validate orders using Openreach, charging them for using its services if the purpose is to aggregate FTTP services. The additional fees create more challenges of AltNets, which in turn slow the effectiveness of Project Gigabit.
“Limited access to resources, dealing with commercial wayleaves and local authority planning permissions to complete complex builds mean that smaller players and AltNets can struggle to get out of the starting blocks. If we look at it from that perspective, not all potential suppliers and players involved in achieving Project Gigabit are treated equally, meaning that levelling up is required among the supply chain too.
“There is also some disparity in the playing field for urban versus rural areas, with some not spots overlooked by the bigger, consumer-focused telcos. For the most part this is due to lack of funding, but also the lack of perceived payback on their investments. Either way, this is an issue that the government should look to address.”
Daren Baythorpe, CEO, ITS, said, “Project Gigabit has not delivered what it should have in the first twelve months. There are a number of reasons for this. While DCMS has learned a lot of lessons from the Superfast programme – like the need to tighten the process and to make it less bureaucratic – the reality of the pandemic, and the pressures this has put on its teams across the board has resulted in a slow start.
“Among the lessons learnt from previous schemes, Project Gigabit has been architected to engage with the altnet community. Yet, the procurement criteria of these bids still exclude a lot of very capable businesses. These challenges focus mainly on the financial threshold, which is something that should be overhauled to ensure there is healthy competition and that the process is open to the players that may be best placed to deliver. The altnets are resourceful, and we are seeing a lot more collaboration and ‘joining of forces’ to overcome some of these challenges.”
Baythorpe added that, whilst these teething problems need to be addressed, there is much to be positive about. He explained, “With the programme now gathering pace, we can expect to see the first areas awarded this year, but probably not until July at the earliest. Nonetheless, this still represents a huge opportunity for the channel in terms of the provision of connectivity services as well as delivering a wealth of ‘over the top’ services too. The demand will be there as so many homes and businesses in these notoriously overlooked areas have struggled to be able to take advantage of services that are underpinned by fast internet connections.”
Audley, from Virgin Media O2 Business, outlined the need for competition. He said, “As Ofcom set out in their Wholesale Fixed Telecoms Market Review, there are some parts of the UK in where there is not – nor is there likely to be – material and sustainable competition to BT in the commercial deployment of competing gigabit capable networks. Therefore support of some kind is likely to be required to promote the necessary investment.
“The Government’s five-year holiday on business rates for new fibre is also due to expire in April. We believe that the Government should be ensuring the right environment exists to support privately funded network expansion and upgrade programmes as they’ve helped drive new regional competition and connect more people.
“Above all, we require long term stability in public policy and regulation that focuses on enabling and unlocking investment. We also need reforms pushed through on planning policy and the Electronic Communications Code to decrease the cost and increase the speed and ease of rolling out new infrastructure.”
Capitalising on opportunities
In terms of the path ahead, Neos Networks’ Willmott highlighted the importance of the industry working together. He said, “A key opportunity for AltNets is to take advantage of network sharing rather than overbuilding in areas which already have full fibre capability through other suppliers. This will help to alleviate the pressures of investment into rural areas, by reducing CAPEX and OPEX needed to bring full fibre connectivity to currently underserved areas.
“Businesses operating within the channel, such as ISPs and MSPs, will be able to benefit from the high-capacity networks being built by AltNets, providing customers with more cost effective and high capacity access circuits.”
Nick Sacke, head of IoT solutions, Comms365, highlighted ways in which channel companies can use these improvements to connectivity infrastructure to develop new propositions. He explained, “For the channel, there are opportunities that arise from the deployment of fibre infrastructure to create and deliver value-added solutions that can even be included in provider portfolios.
“Another potential for the channel is to add high value security and IoT solutions to the fibre connection to create additional value for customers. [For] example, indoor and outdoor gateways [can be] added to the fibre connection for deep coverage inside and outside building to service multiple use cases requiring sensor technology, including healthcare and assisted living, EV parking bay monitoring, smart waste management, energy usage, and environmental air quality, which are critical to sustainability and the health of employees. Here, fibre is the transport layer for critical data from diverse sources, not just a connection for streaming services.”
CityFibre’s Heritage-Redpath called for channel businesses to grab the opportunities in front of them. “Now really is the time to act. The opportunities are plentiful, not only with the compelling event of the impending copper switch-off from 2025, but also as more businesses start to return to the office and adopt hybrid working solutions, all of which require an assessment of current connectivity services. This is a golden opportunity for the channel to encourage customers to reassess their connectivity needs and seriously consider the inevitable benefits of Full Fibre to support their ever-increasing bandwidth needs.
This feature appeared in our March 2022 print issue. You can read the magazine in full here.