Altnets feel the fibre of the Treasury’s fabric
The government has launched a new fund designed to spur investment in new fibre broadband networks across the country.
The Digital Infrastructure Investment Fund (DIIF) will see £400m set aside for companies who exclusively want to build Fibre to the Premises (FTTP) networks.
FTTP lines are faster and more resilient than the superfast services which the likes of BT and Virgin Media have rolled out to most of their customers. FTTP is also more expensive to deploy, especially for companies with large legacy networks.
According to the government, lack of clear evidence for future demand means that FTTP isn’ t always an attractive proposition for outside investors, which is why hundreds of millions, to be managed by infrastructure specialists, is being set aside.
The Treasury has specifically talked up CityFibre’s Peterborough network as an example of a fibre provider which could benefit from DIIF cash to accelerate expansion:
“Peterborough was the winner of Smart City of the Year at the 2015 World Smart City Awards. It has a 120 km full fibre network, built by an independent network builder and operator, CityFibre, following a successful demand aggregation campaign, which saw 25 per cent of the city’s businesses register an interest and enabled the network to be extended to all six of Peterborough’s business parks…
“With the Peterborough core network established and successful, benefiting from a motivated local authority and demand aggregation, the city is now a prime candidate for further extension of the network to residential areas, which the DIIF could help finance.”
CityFibre has core networks in 42 cities and towns up and down the country, from as far afield as Aberdeen and Plymouth. Combined, its networks pass 4 million homes and 280,000 businesses. In York, TalkTalk and Sky have been conducting trials with commercial FTTP, using CityFibre’s York network as a springboard.
While CityFibre mainly targets urban areas, last year it signed an agreement with fellow fibre provider Gigaclear, which is focussed on delivering gigabit services to rural communities. Earlier this year, Gigaclear announced that it had secured £111m from private investors.
Another company which could benefit from DIIF money is Hyperoptic, which, like CityFibre, mainly targets urban customers.
Hyperoptic’s footprint current covers 200,000 customers across a number of cities including London, Edinburgh, Cardiff, Birmingham, Glasgow and Manchester. It’s aiming to have its up to 1Gbps services available to 500,000 customers by 2018 and has already secured a £21m loan from the European Investment Bank to help achieve this.
While BT and Virgin Media have not been explicitly ruled out, but the implication is that unless the money is spent purely on FTTP, companies won’ t be allowed to bid.
Both BT and Virgin’s network divisions are currently investing in FTTP and aim to have passed at least 2 million addresses with full fibre by 2020. At the same time, there’s plans to expand the scope of Fibre to the Cabinet (FTTC) , G.fast and HFC availability, all of which use optical fibre, but rely on copper connections to make up the so-called ‘last miles’ .
Companies which are eligible to apply will need to directly contact the investment firms the government’s appointing to manage DIIF; Amber Infrastructure Group and M&G Investments.
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