UK altnet CityFibre has secured £318 million worth of public funding to help it roll out fibre to 218,000 UK homes and businesses.

Mary Lennighan

July 3, 2023

3 Min Read
CityFibre van

UK altnet CityFibre has secured £318 million worth of public funding to help it roll out fibre to 218,000 UK homes and businesses.

The full fibre specialist bagged three funding awards under the government’s Project Gigabit, which will – eventually – spend £5 billion to hook up hard-to-reach areas to high-speed broadband. The three contracts cover Norfolk, Suffolk and Hampshire, and also require CityFibre to commit some of its own cash: £171 million in total, bringing the combined investment up to the best part of half a billion pounds.

Not that anyone ever said fibre rollout was cheap, particularly in the types of rural location covered by the awards. Hence the existence of Project Gigabit in the first place. Progress hasn’t exactly been lightning fast, since the government awarded the first contracts in August last year, a £6 million deal to cover 7,000 premises in North Dorset.

In fact, these latest awards to CityFibre more than double the amount of Project Gigabit funding awarded by BDUK – Building Digital UK, as it’s now known – to date; prior to these announcements, the scheme had handed out just over £270 million to eight regional broadband projects, including a £69 million award to CityFibre to cover 45,000 premises in Cambridgeshire in March.

The fact that the state has now handed out north of £300 million to CityFibre suggests that the project is starting to find its feet. But also that it needs the input of bigger players to push it forward.

Indeed, CityFibre announced the wins as part of a broader commitment to reach half a million addresses in the three counties. It will roll out fibre to an additional 283,000 homes in Norfolk, Suffolk and Hampshire under its own steam, as part of its 8 million UK homes rollout plan. It hit the 2 million milestone last September and is now at around 2.8 million homes.

Unlike the Project Gigabit coverage area, CityFibre’s planned 8 million footprint consists of commercially viable homes and businesses. However, the wholesaler believes that the additional homes it will cover thanks to the government funding will prove “highly attractive” to its ISP customers, since its network will be the only gigabit-capable infrastructure in the area.

“Securing three further Project Gigabit contracts firmly establishes CityFibre as an integral delivery partner to government for rural connectivity,” said chief executive Greg Mesch. “Our growing participation is central to our strategy, optimising our commercial rollout plan alongside the programme to provide our ISP customers with unrivalled network density in regions throughout the country.”

CityFibre said it has started planning work in its Project Gigabit contract locations, and that it expects to make the first connections early next year. By which time the government should hopefully have allocated more funding that will take it closer to its £5 billion headline figure. Because at the moment, that looks to be some way off.


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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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