Superfast UK: looking to ultrafast millions

Part I – the infrastructure builders

This report covers the latest announcements and activities of the country’s two largest broadband players, Openreach and Virgin Media, as well as developments and progress made by the alternative infrastructure providers.

A new report from Point Topic provides an update to our September 2017 publication, Superfast UK: investing in ultrafast part I – the infrastructure builders. It covers the latest announcements and activities of the country’s two largest broadband players, Openreach and Virgin Media, and looks at developments and progress made by the alternative infrastructure providers.

As with our previous superfast broadband publications, this report focuses on fibre-based network deployments including fibre-to-the-cabinet (FTTC), fibre-to-the-premises (FTTP) and fibre-to-the-building (FTTB) with the exception of student and military accommodation. We also cover superfast cable infrastructure (Docsis 3 and in future Docsis 3.1).

Key developments

  • Openreach continues to be the UK’s largest superfast broadband infrastructure provider, now passing 27.4 million premises and connecting around 9.2 million; on 1 February 2018 it announced its Fibre First programme to reach three million premises by the end of 2020 and put it on course to 10 million by the mid-2020s as long as the ‘right conditions’ are in place. It currently provides 500,000 residential premises with access to FTTP
  • Virgin Media’s Project Lightning added 536,000 marketable premises during 2017, which means it has deployed to over 1.1 million since launch; rollout in Scotland is now ramping up. Once again it raised the speed stakes by announcing a bandwidth boost launching services of up to 350Mbps for households
  • The UK’s alternative network sector has seen significant announcements on full fibre deployment to millions of homes. CityFibre announced a deal with Vodafone to rollout out FTTH technology to one million homes and a possible five million by 2025; TalkTalk Group announced a Heads of Terms with Infracapital to deploy full fibre networks to three million premises. In addition, Infracapital has acquired WightFibre and is funding plans for a Gigabit Island on the Isle of Wight, and has offered to buy rural FTTP provider Gigaclear in a deal which values the company at £270 million

Alternative network operator plans to cover millions

The past six months has continued to see investment and deployment activity in the UK’s alternative network operator sector. Perhaps the most dramatic announcements have been those relating to full fibre deployment to millions of homes. Further investment is coming into the sector, and new markets being identified and created. We also seeing new players enter the altnet scene.

CityFibre, now positioned as the largest alternative wholesale infrastructure provider in the country, announced an agreement with Vodafone to rollout out FTTH technology to one million homes and a possible five million in total by 2025.  Also on the home front, TalkTalk Group announced a Heads of Terms with Infracapital, the infrastructure equity investment arm of M&G Prudential, to create a new infrastructure builder to deploy full fibre networks to three million premises.

Indeed Infracapital, which is one of the fund managers tasked with overseeing the UK Government’s Digital Infrastructure Investment Fund (DIIF), is emerging into a major full fibre player investor. It has acquired WightFibre and is funding the operator’s plans for a Gigabit Island on the Isle of Wight, and has offered to purchase Gigaclear in a deal which values the company at £270 million.

In the multi-dwelling unit (MDU) market, Hyperoptic passes 400,000 homes with its gigabit broadband service. Other MDU players are expanding, including Community Fibre with wayleaves covering over 100,000 homes in London, Vision Fibre Media with new deployments planned in London’s Barbican area, and Optify (renamed from Relish Networks and part of PCCW Global), which now has a brand focused on home fibre provision.

Although deployments in the UK’s universities are not covered specifically by this report, the student market continues to provide a base for alternative fibre operators to address the wider residential and business sectors. We have profiled a number of these in previous reports including Ask4, CableCom Networking, Relish previously known as Keycom, ITS Technology Group, SDC Group and Velocity1.

This market is opening the door to a new sector, which follows students as they turn into young professionals. CableCom is eying the Built to Rent sector from its large student base after its business market acquisition around a year ago of business park specialist WarwickNet. Indeed student providers including CableCom look set to ride the wave of shared living schemes and apartments in general. Hyperoptic is also active in the area, and Ask4 is looking at purpose built shared living schemes, consisting of any development of 50 units or more that do not have an agreement with a university.

The new build housing market is also drawing a number of altnets. GTC with its sister company IFNL, already has a strong foothold in this market with around 30,000 homes connected. Grain Connect has announced new deployments including one in partnership with Barratt Homes’ brand David Wilson Homes. Meanwhile new entrant British Fibre Networks says that new homeowners and builders have been subject to a monopolistic offer, which is overpriced and never installed in time for when the customer moves in, an issue the company says it aims to address.

Community broadband groups continue to experience mixed fortunes. Broadband for the Rural North (B4RN) is going from strength to strength with over 4,000 premises connected and the B4RN East Anglia network has gone live in Norfolk. Fibre for Rural Nottinghamshire (F4RN), another B4RN inspired project, is also seeing strong take-up, at 75 per cent. And in Scotland the Balquhidder Community Broadband network has launched. However B4GAL and North Skye community groups have both announced their closure, instead relying on Scotland’s R100 programme.

Meanwhile Kingston upon Hull’s KCOM, although not technically an altnet, is making strong progress on the way to its target to pass 200,000 premises with its predominantly FTTP network.

Our Superfast broadband projects directory also to be updated shortly, lists the country’s alternative network fibre-based projects.

Get access to the full report and directory

The full version of this report is included in Point Topic’s UK Plus service. More information can also be found in our Superfast UK: looking to ultrafast millions–part I the infrastructure builders report and our Superfast broadband projects directory also published this month. Please contact Simona Pranulyte on +44 (0)20 3301 3303 or e-mail simona@point-topic.com for more details.

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