UK government nearly ready to deliver £5bn gigabit broadband funding

A year after it first pledged to plough £5 billion into gigabit-capable broadband for hard-to-reach areas, the UK government has formally kicked off the initiative, now known as Project Gigabit.

Mary Lennighan

March 19, 2021

4 Min Read
UK government nearly ready to deliver £5bn gigabit broadband funding

A year after it first pledged to plough £5 billion into gigabit-capable broadband for hard-to-reach areas, the UK government has formally kicked off the initiative, now known as Project Gigabit.

While it has shared a certain amount of information on the areas set to benefit from the first phase of funding, we are still lacking some key details, like how much of that much-vaunted £5 billion figure the government is actually spending at this stage.

Details on the number of properties that will be connected under phase one are also a little loose. The announcement that came from the Department for Digital, Culture, Media and Sport (DCMS) on Friday proudly declares that “up to 510 homes and businesses” across half a dozen regions (more on those below) will gain access to 1 Gbps broadband, should they choose to connect. But the small print paints a slightly different picture. The number of premises connected could be fewer than 400,000 based on the lower end of the government’s forecast range.

This phase of the scheme will cover: 110,000-130,000 premises in Durham, South Tyneside & Tees Valley and areas of Northumberland; 120,00-140,000 premises in Cambridgeshire and adjacent areas, including Peterborough and parts of Northamptonshire, Essex, Hertfordshire and Rutland; and tens of thousands of premises in each of: West Cumbria including in the Lake District National Park; North and West Northumberland and East Cumbria; East Cornwall; and West Cornwall and the Isles of Scilly.

In addition to those first six regional contracts, there will be further local supplier contracts in Essex and Dorset, the state said.

When it comes to the allocation of funding, the government has outlined a strategy that will enable broadband network providers of all sizes to bid for local, regional and cross-regional contracts. Contracts for the first areas will go to tender in the spring – you could argue that it is already spring, but we don’t have a more firm date than that – with “spades in the ground,” in the government’s own words, due in the first half of 2022.

The contracts available for funding under phase two will be announced in June, the government said. This phase will cover the rollout of gigabit-capable networks to up to 640,000 premises in Norfolk, Shropshire, Suffolk, Worcestershire, Hampshire and the Isle of Wight.

According to Digital Secretary Oliver Dowden – brace yourself, your eyes might roll right out of your head at his choice of wording – “Project Gigabit is our national mission to plug in and power up every corner of the UK and get us gigafit for the future.”

Gigafit? Oooof.

Joking aside, this is clearly an important state initiative to help spread high-speed broadband connectivity – we’re talking gigabit-capable networks, not just fibre, much to the chagrin of many in the industry – to underserved areas at a time when it has become more important than ever before.

Dowden notes that the country has already made good progress in this area, “with almost 40 percent of homes and businesses now able to access next-generation gigabit speeds, compared to just 9 percent in 2019.” DCMS adds that half of households will have access to gigabit speeds by the end of this year, although its assertion that “the UK is on track for one of the fastest rollouts in Europe” feels a little thin when the UK is starting from a position that is behind many other markets.

The DCMS announcement included canned statements from BT’s Openreach, fibre altnet CityFibre, and rural provider Gigaclear, all of which indicated that they will look at participating in this project.

“We’ll be considering these proposals for the final 20% with interest and we’re keen to support the Government. This is a massive opportunity to level-up the country and boost the bounce-back after the pandemic, so it’s important the process moves quickly and that all operators do their bit,” said Openreach CEO Clive Selley.

BT was the only recipient of funding under the first phase of the BDUK programme, an earlier government project designed to increase access to high-speed broadband, which ended around five years ago; a number of altnets, including Gigaclear, joined in the second phase. It is perhaps this experience that is colouring Selley’s thinking. Clearly the incumbent is not keen on going it alone this time.

About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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