Alternative service provider Gigaclear has picked up three contracts under the second phase of the UK government’s Broadband Delivery UK (BDUK) programme, which aims to infill gaps in broadband coverage in rural areas.
Last week, the small but growing fibre-to-the-premises (FTTP) provider signed a deal with Superfast Berkshire to bring fibre to 11,700 homes and businesses in West Berkshire. Last month, Gigaclear was awarded contracts in Essex and Gloucestershire.
The UK government had initially set aside £530 million of public funding to help BDUK extend superfast broadband – defined as download speeds of 24Mb/s or faster – to reach 90 per cent of premises by 2016.
The Superfast Extension Programme (SEP), announced in February 2014, is a second phase of procurement, representing a further £250 million investment by the government and an ambition to extend superfast broadband to 95 per cent of the UK by the end of 2017.
All 44 contracts under the first phase of the BDUK programme were awarded to BT, which was one of just two suppliers appointed under the procurement framework used by most local authorities. The other supplier, Fujitsu, did not bid for contracts and withdrew from the process.
However, in the second phase, local authorities have decided to look outside the framework, as they seek new ways to bring broadband to rural communities – the so-called ‘Rural Challenge’. The three contracts won by Gigaclear have been awarded under this second phase, and are the first to be awarded to an operator other to BT under the government-subsidised BDUK programme.
In order to bid for the contracts, Gigaclear is also required to make a significant investment of its own.
In West Berkshire, Gigaclear will invest more than £4 for every £1 of state aid, contributing nearly £16 million to transform the online experience for all those living in the project area. Public funding of £3.7 million from BDUK, West Berkshire District Council and Thames Valley Berkshire Local Enterprise Partnership and the private investment of £16 million from Gigaclear will provide a total investment pot of almost £20 million (details here).
In Essex, Gigaclear has been selected to provide a fibre network to 4,500 homes and businesses across Epping Forest. The £7.5m ‘Rural Challenge’ project is part-funded by BDUK, Essex County Council, Epping Forest District Council, with Gigaclear making a contribution of £5.5 million (details here).
Meanwhile Fastershire, a public-private partnership to roll out faster broadband across the UK counties of Gloucestershire and Herefordshire, has awarded Gigaclear the contract to deliver FTTP to 6,495 rural homes and businesses in the Cotswolds. The total budget for this contract is £10 million, with £3 million coming from Fastershire and the remainder from Gigaclear (details here).
Matthew Hare, chief executive, Gigaclear, said: “We’re delighted to celebrate a hat-trick of successes in being selected to bring ultrafast broadband to the Cotswolds, Epping Forest in Essex and now West Berkshire. Giving these areas one of the best and most reliable broadband services in the world means businesses and residents of all ages will benefit. We are excited that these investments will make a significant contribution to economic development as well as transforming the online education, communications, entertainment and business experience.”
Commenting on the Fastershire project, he added: “What was refreshing about this tender was the identification of the specific addresses of the 6,495 properties that the contract sought to serve. This clarity gave us the confidence to offer our gigabit fibre broadband service to every single property in the tender.”
In addition to winning the BDUK contracts, Gigaclear has already started to roll out commercial networks in a number rural locations across the UK, including its home county of Oxfordshire. The company has already built and operates 23 rural fibre networks, and has a further 31 in construction.
For example, Gigaclear has just supplied a fibre network to Uppingham school in Rutland which has around 800 pupils. Since moving to Gigaclear fibre, the school reported it’s first-ever terabyte of data – one million megabytes – downloaded/uploaded recently in a single day.
To help fund its roll-outs, in May 2015 Gigaclear secured £20m in equity commitments from new investor Infracapital, the infrastructure investment arm of Prudential, and a further £10 million from existing shareholder Woodford Investment Management.
Rural networks are always more difficult to finance and as such have often been left behind as network providers opt to cherry pick the homes in urban areas because they are less expensive to connect. The BDUK scheme in the UK has been widely criticised, but now looks set to deliver some interesting new broadband options for rural homes and businesses.