“Our regular survey of alternative superfast infrastructure projects shows a second wave of players with new money entering the market,” says Annelise Berendt, Senior Analyst at Point Topic. “While BT’s plan to increase the pace of its next-generation network rollout, Virgin Media’s 100Mbps network upgrade and Fujitsu’s challenge for government money are well known, they are joined by several smaller players who have persuaded financiers to put up cash. These include CityFibre, Gigaclear, Call Flow Solutions and Hyperoptic.
“Meanwhile, Kingston Communications, the incumbent in Hull, has begun upgrading areas of its network for fibre-based services, launching a trial in September 2011,” adds Berendt. “And there are other names getting involved through the BDUK framework such as Network Rail, Balfour Beatty and Thales in addition to BT and Fujitsu.”
BDUK (Broadband Delivery UK) is the agency charged with using over £500 million of government funds to help build superfast broadband where it would otherwise not be available. BDUK has created a ready-made bidding framework to ease the task for the local economic partnerships – groups of local authorities – which will be charged with spending the money.
Point Topic’s superfast broadband survey carried out bi-annually, tracks the progress of the country’s alternative fibre-based infrastructure providers. The new edition will include about 100 different superfast projects, from helping single villages to rolling out superfast services across whole regions. About 20 of the projects are being pursued by the two big network owners, BT and Virgin Media, with a variety of pilot projects, trials and collaborations as well as their main rollouts. The remainder are split about evenly between the public and the private sectors.
“What’s encouraging on the private side is to see the way smaller firms are bringing new money into the business,” says Berendt. For example, CityFibre Holdings, has acquired the part-built fibre-to-the-home network installed in Bournemouth by the now-defunct Fibrecity enterprise. From that base CityFibre is trying to raise the money to deploy fibre to one million homes and 50,000 businesses in secondary towns and cities.
Sub-loop unbundling pioneer, Rutland Telecom, has sold a majority stake to Gigaclear and has now outlined county-wide ambitions. New player Hyperoptic, which focuses on taking fibre to apartment blocks, announced its first deployment in October 2011, and Call Flow Solutions, already involved in publicly-funded projects in Kent, is rolling out a commercial sub-loop unbundling installations in the village of West Peckham.
“With the BDUK funding allocation process now well underway, and new sources of private sector investment coming forward, this all looks promising for superfast broadband Britain,” explains Berendt. “But on the other hand from past experience, we know it takes a long time for investment, plans and network rollouts to turn into real customers.”
The prospect of a number of alternative superfast networks also brings challenges in terms of network integration and the ability to build the scale required to attract big name service providers. “These are issues the industry has been grappling with for some time and are ones that will no doubt continue to run,” concludes Berendt.