UK Superfast Broadband Projects Directory 2014: crunch year for Superfast UK

Prepared by: Annelise Berendt Date: 14 February 2014 Version: 1.0

Point Topic Ltd 73 Farringdon Road London EC1M 3JQ, UK Tel. +44 (0) 20 3301 3305 Email [email protected]

Point Topic – UK Plus report – 2014: crunch year for Superfast UK

Contents

1. Background 4

2. Introduction 5

3. The service provider picture 8

4. BT Group puts another £50m into the pot 11

4.1 Fibre on Demand developments 11 4.2 Self-install getting closer 12 4.3 Multicast for GEA launched for TV provision 12 4.4 Cornwall passes target and begins to impact local economy 13 4.5 Northern Ireland FTTC network has over 150,000 customers 13 4.6 BT looks to raise its MDU game 14 4.7 Last batch of 19 exchanges quietly announced 14 4.8 BT Retail sees strong fibre-based growth 16 5. Virgin Media increases the speed stakes 17

5.1 Higher speed services and boosts for existing customers 17 5.2 Virgin acquires Smallworld Fibre 17 6. Altnets move into make or break year 18

6.1 CityFibre floats on AIM 18 6.2 Gradwell launches GigaBath based on CityFibre infrastructure 19 6.3 IFNL continues to build homes passed numbers 20 6.4 Hyperoptic launches in Olympic Village 20 6.5 Venus welcomes Connection Voucher Scheme 21 6.6 Community Fibre in Westminster pilot 21 6.7 Velocity1 uses Wembley to showcase the bigger picture 21 6.8 Call Flow Solutions continues private and publicly-funded rollout 22 6.9 Fibre Options seeing increasing developer interest 22 6.10 Gigaclear continues to grow rural footprint 23 6.11 B4RN sticks to its coverage plans 23 6.12 Cybermoor FTTP services go live 24 6.13 LonsdaleNET launches fibre network in Cumbria 24 6.14 TripleConnect in Cumbrian new build fibre deployment 25 6.15 KC fibre connections approach 7,000 lines 25 6.16 The closure of Digital Region 26 6.17 Student fibre sector is a springboard for the wider market 27

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

7. Government says Superfast Britain is on track 28

7.1 New £10 million fund for alternative technology providers 28 7.2 New BDUK chief takes the helm 29 7.3 DCMS commissioned report on the benefits of broadband 29 7.4 Rural Broadband Fund contracts in the delivery stage 30 8. Slow going for the RCBF 31

8.1 Fell End completes first phase 31 8.2 Fibre GarDen to work with ITS Technology Group 31 8.3 Noke issues State aid consultation document 32 8.4 Northmoor plans April start 32 8.5 First RCBF funded cabinet goes live in Rothbury 32 9. Urban broadband voucher scheme rolls out 34

9.1 Ten cities offering voucher scheme 34 10. Devolved nation initiatives update 35

10.1 Digital Scotland and CBS progress 35 10.2 Northern Ireland proposes intervention areas 36 10.3 Superfast Cymru sees over 100,000 premises gain high-speed access 37

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

1. Background

This short report provides an update to our August 2013 publication, Superfast UK reviews, rethinks and revises. It covers the latest announcements and activities of the two largest superfast players, BT and Virgin Media. It looks at progress by the country’s alternative infrastructure suppliers, and provides an update on the Broadband Delivery UK (BDUK) process, and activities at local authority and community level. Further details of the projects mentioned here, and many others, can be found in a separate Superfast broadband projects directory. 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 accommodation. We also refer to superfast cable infrastructure (Docsis 3). Although we do not cover wireless broadband connections specifically, some of the players mentioned use fixed wireless broadband technology as part of their overall offering.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

2. Introduction

2014 will be the crunch year for superfast broadband in the UK. The Government is keen to move on after a barrage of criticism over the past 12 months of the BDUK process and of BT as the only supplier left in the Rural Broadband Fund framework. It is therefore taking care to celebrate progress in achieving its revised target to bring superfast broadband – that is over 24Mbps – to 95 per cent of the country by 2017. Its announcement of a new £10 million fund to support innovative technology solutions for the most remote communities signals a desire to look beyond the past year of county council Local Broadband Plans and contracts, and to bolster funding for the final five per cent given the flagging Rural Community Broadband Fund (RCBF) initiative. This continues to be hampered by wrangling over BT and local authorities’ lack of detail on where these homes and businesses actually lie. A new head at BDUK in April 2014 will also provide something of “a new broom”, and is timed to bring in commercial experience to oversee the next stage of rollout. The demise of the Digital Region network is a blow to the alterative network operators’ case. However, nimbler niche providers are ramping up in urban and rural areas, specialising in terms of premises, location and customers rather than trying to be all things to all end users. Some of these players are now attracting serious funding and the floating of CityFibre on the Stock Exchange’s AIM market suggests growing confidence for specialist providers among the alternative network community. A number of altnets are also involved in the Governments Connection Voucher Scheme. In terms of the two big players, BT Openreach’s predominantly fibre-to-the-cabinet (FTTC) network passed over 18 million premises at the end of January 2014. Virgin Media’s network passed 12,520,100 homes at the end of December 2013. The cable operator’s acquisition of Smallworld Fibre announced in early February 2014 will instantly provide another 40,000 premises. Point Topic has collated the fibre-based projects of 18 active alternative network operators over 35 community-led initiatives, either underway or at various stages of planning, as published in our separate Superfast broadband projects directory. These are diverse in nature and illustrate the range of players and approaches that continue to be active on the UK’s superfast broadband scene. Table 1 gives estimated fibre-based and Docsis 3.0 superfast connections at the end of December 2013 for deployments with connections of 10 lines and above. The majority are to residential properties with some to SMEs. We also provide figures for premises passed, giving Point Topic estimates where actual numbers are not available.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

Table 1: Superfast fixed broadband connections, end-December 2013

Operator Project Locations Technology Connections at end Total premises passed December 2013 reported by network (estimates in italics) operators end December 2013 (estimates in italics)

Ask4 Leeds FTTB 7,300 10,000 Atlas Middletown, Northern FTTC 50 150 Communications Ireland Arc apartments in FTTB 175 400 Titanic Quarter, Northern Ireland Broadband for Lancashire, phase 1 FTTP 300 460 the Rural North (B4RN) BT Openreach Enabled exchange FTTC 2,386,000 18,000,000 of which areas: BT Infinity estimated 112,000 are FTTP 14,000 FTTP Call Flow Kings Hill, Well Hill & FTTC 1,300 4,000 Solutions Knockholt, Crockenhill & Well Hill, Yalding, Hunton & Collier Street, Rolvenden Chess Telecom Leeds, Liverpool, FTTB 719 1,079 (acquired London Isrighthere) CityFibre Holdings Bournemouth FTTP 250 21,000 Community Fibre Westminster FTTB 20 150

Connexin (took Ashby de la Launde, FTTP 60 65 over assets of Lincolnshire NextGenUs UK CIC) Cybermoor Cumbria FTTP 15 300 Digital Region South Yorkshire FTTC and 3,750 480,000* some FTTP Gigaclear and Rutland FTTC 800 2000 Rutland Telecom Kent, Oxfordshire and FTTP Rutland Fibre Options Derwenthorpe FTTP 60 64 Overbury FTTP 30 90 FizzyLiving Four sites in London FTTB 50 200 G-Ti Gateshead FTTP 80 80 Hampshire Villages of Smannell, FTTC 30 53 County Council Little London and

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

Enham

Hyperoptic London various sites FTTB 5,200 26,000 IFNL Across 17 sites FTTP 6,084 7,180 KC In and round Kingston FTTP, FTTC, 6,980 27,879 upon Hull FTTN, FTTB MediaCityUK Salford Quays in FTTB 244 378 Salford, Greater Manchester Smallworld Fibre Irvine, Dreghorn, Troon Docsis 3 2,500 40,000 (acquired by and Kilarnock in West Virgin Media of Schotland, and February 2014) Carlisle, Lancaster and Morcambe in North- West England TripleConnect Carlisle FTTH 15 25 Velocity1 Wembley, NW London FTTB 630 630 Virgin Media 30 to 100/120Mbps Docsis 3 3,200,000 13,3 54,000** Woolhampton FTTP 10 10 Venus Business Battersea (residential) FTTB 24 24 Communications Vtesse Networks Across deployments in FTTC 220 1,247 (not taking new Hertford, Rugby, orders) Broughton and Hatt and Higher Pill near Saltash, Cornwall West Glasgow FTTP 100 100 Whitlawburn Housing Co- operative WightFibre Isle of Wight Docsis 3, 2,500 13,000 FTTP

* Digital Region covers 80% of the homes that are connected to the PCPs it covers. Point Topic estimates this number to be 391,000 of what we count as 617,000 premises in South Yorkshire. We are continuing to include figures because no network switch-off has been announced ** Point Topic estimate for homes and businesses passed by the Virgin Media cable network; Virgin Media reports 12,520,100 homes and residential multiple dwelling units passed at end-December 2013

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

3. The service provider picture

There are at least 80 service providers reported to be using Openreach’s fibre-based network, up from 60 in early October 2012. Openreach made 339,000 net connections during the last three months of 2013 of which around one third were for service providers other than BT Retail. Point Topic estimates that total lines for these providers now stand at around 0.5 million. TalkTalk reported an increase of 35,000 FTTx customers during Q4 2013, bringing its total fibre base to 177,000. The service provider noted that fibre growth had benefited from promotional activity during the quarter and has since returned to a more regular pattern of growth. It went on to say that demand for fibre from its customers remains modest except when it can deliver transformational improvements in their broadband experience, such as for those customers who currently achieve less than 2Mbps speeds and might wish to take TV. The cities are where alternative network operators are perhaps making most headway in terms of service promotion. Altnets including Venus Communications and Hyperoptic are leveraging the Government’s Connection Voucher Scheme for SMEs to promote not only their services but their growing network coverage and technology. Table 2 lists service providers offering fibre-based products in January 2014 on a variety of next- generation fibre-based networks. Table 2: Selection of ISPs offering superfast services, February 2014

Operator Location (if geographical specific) Network ADSL24 Openreach AOL (part of TalkTalk) Openreach Andrews & Arnold Ltd Openreach (AAISP) Aquiss Openreach Digital Region including acquisition Ask4 of RiPWIRE customers, own FTTB installations, Openreach Atlas Communications Middletown and Titanic Quarter, NI Own FTTC and FTTB installation BT Retail Openreach Call Flow Solutions Kings Hill in Kent; Crockenhill in Kent Own FTTC installation Central Technology South Yorkshire Digital Region Chess Telecom (now owns Openreach Littlebigone) Clara.net Openreach Clearstream Openreach Community Fibre Westminster in London Own FTTB installation Taken over FTTH network from Connexin Ashby de la Launde NextGenUs UK CIC Daisy Wholesale Openreach Demon Internet Openreach Digital City Region South Yorkshire Digital Region

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

Eclipse Openreach EE/Orange Openreach Elite Openreach Entranet Openreach Exa Networks Openreach FTTC on Fluidata wholesale Fastnet platform (Hampshire); Openreach Gamma Openreach FTTP on CityFibre’s Bournemouth Gigler network Griffin Internet Openreach Goscomb Technologies Openreach Hyperoptic London Own FTTB installations FTTC on Fluidata wholesale IDNet platform (Hampshire); Openreach Internet For Business Openreach Internet Central Openreach Isrighthere Liverpool; Chelsea; Leeds Own FTTB installation Own FTTC, FTTH and FTTB KC Kingston upon Hull area installations Littlebigone (now part of South Yorkshire Digital Region Chess Telecom) Mainstream Digital Openreach LonsdaleNET Melkinthorpe in Cumbria Own FTTP installation MDNX Openreach Merula Openreach NewNet Openreach Oosha Openreach Origin Digital Region Plusnet Openreach Powernet Openreach Redstone Openreach Rutland Telecom/Gigaclear Sites in Rutland and Oxfordshire Own FTTC and FTTH installations SAQ Openreach IFNL FTTH installation – retail ISP Seethelight 17 sites designed to kick-start deployment Sky Broadband Openreach Irvine, Dreghorn, Troon and Kilarnock Smallworld Fibre (acquired in West of Schotland, and Carlisle, by Virgin Media February Own Docsis 3.0 network Lancaster and Morcambe in North- 2014) West England Star Technology Openreach Spectrum Internet Openreach

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

TalkTalk Openreach TalkTalk Business Openreach Timico Openreach Total Web Solutions Ltd Openreach TripleConnect Carlisle Own FTTH installation Updata Openreach UTV Internet Openreach Quintain Estates & Development Velocity1 Wembley and Industria Media FTTB Venus Communications Own FTTP installations Vfast Internet Openreach Virgin Media Own Docsis 3.0 network Vispa Openreach Birch Green and Hertingfordbury, in Vtesse Networks FTTC (not taking Vtesse Broadband Hertfordshire new customers) Vivaciti Openreach Web Tapestry Openreach West Whitlawburn Housing Cambuslang in Glasgow Own FTTB installation Co-operative Whippet Internet Kent Call Flow Solutions WightFibre Isle of Wight Some FTTP along with Docsis 3.0 Zen Internet Openreach

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

4. BT Group puts another £50m into the pot

On 24 January 2014 BT Group announced it will invest a further £50 million into its commercial fibre broadband programme over the next three years targeting more than 30 cities to bring high-speed broadband to 400,000 additional premises. The focus of this new investment will be enabling city cabinets that were not part of BT’s original commercial plans due to technical challenges or local planning restrictions, deploying fibre to cabinets to serve multi-dwelling units such as apartment blocks, and laying further fibre including fibre-to-the-premises (FTTP) technology to new build sites in cities. The BT Openreach fibre-based network now passes over 18 million premises and had around 2.4 million live connections at the end of January 2014. Openreach’s fibre revenue was up 72 per cent during the latest quarter. According to BT Group’s Chief Executive Gavin Patterson, the period was a record quarter for BT Retail’s fibre take-up. Factoring in this latest investment announcement BT says it is spending more than £3 billion on deploying fibre broadband – £2.5 billon on its commercial fibre footprint which will cover around 19 million premises, and further funds in rural fibre projects, including many under the BDUK programme. On the rural side, the operator says it is making progress with extending fibre to rural areas. It has won 46 regional broadband contracts including those funded by BDUK, Superfast Cornwall and Northern Ireland. Build was underway in 36 of these areas at the end of January 2014 passing around 170,000 premises during the last three months of 2013. BT is also working with RBCF grant awardee Rothbury in Northumberland (further details are provided below). Also in January 2014 the company announced a new CEO for Openreach, Joe Garner, who will join in mid-February 2014 to replace Liv Garfield who is leaving to become CEO of Severn Trent. Garner’s most recent role was at HSBC and BT highlights his experience of working in a strictly regulated industry and of dealing with regulators, not least through another previous role as Chairman of the Financial Services Authority’s Practitioner Panel. BT has made a number of other announcements since our last report in August 2013 regarding its next-generation broadband programme. The key ones are outlined below.

4.1 Fibre on Demand developments

Another 82 exchange areas were announced for Fibre on Demand (FTTPoD) coverage in December 2013, with availability scheduled during 2014. Already 60 exchange areas have been named and a further set of exchanges should be announced by the end of March 2014, bringing the total to 303. On 28 January 2014 Openreach announced price rises for the FTTPoD product, effective from 1 May 2014. The connection charge will increase from £500 to £750, while the monthly cost will rise from the current £38 plus VAT to £99 plus VAT under a three-year contract. There are also price increases for one-off distance-based charges from £2 per metre to £3 per metre. Demand for the product so far is reportedly low.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

4.2 Self-install getting closer

There have been developments in Openreach’s CPE Enablement programme which is key for self- installation. This introduces a GEA-FTTC variant that allows service providers to supply their own integrated VDSLmodem/router device – regarded as an important move leading to self-installation options from service providers and therefore promoting mass market FTTx take-up. By doing away with the need for an engineer’s visit, costs should be reduced and customers will not have to wait in for their arrival. In late November 2013 the operator announced the early market deployment launch of PCP Only and communication provider control of modems from 31 December 2013. The programme will run for around six months bringing two key changes:

PCP Only – this is a connection variant where the Openreach engineer carries out the “jumpering” activity at the local street cabinet and then closes the job with the service provider or end user responsible for completing of the installation in the end user premises. Managed Engineer Installation with CP Device – when an Openreach engineer visits the end user premises, does everything that they would with a managed install but plugging directly into the service provider’s device rather than installing an Openreach modem. Previously only two installation approaches were available – basic install where an Openreach engineer installed the Openreach modem with anything beyond that down to the end-user, and managed install which included installation of the Openreach modem, the service provider-supplied router and checks on the connection using a computer belonging to the end user. From summer 2013 providers could work with Openreach to verify their VDSL modem/routers for use on the Openreach network and start to issue them to end users rather than using the Openreach modem. In September 2013 it was reported that Sky was one of the first providers to move beyond staff-based trials for self-install FTTC services and was sending at least one customer an integrated Sky device comprising built-in VDSL2 modem. BT Retail and EE were also reported to be close to having their own integrated solution with VDSL modem and router in the same equipment. Also in September 2013 Openreach announced it was considering a potential connection pricing offer on basic and managed installs to incentivise take-up of fibre broadband by service providers within the footprint of a selected number of exchange areas. It was asking for feedback on likely engagement and interest in such an offer.

4.3 Multicast for GEA launched for TV provision

On 25 November 2013 Openreach launched its Multicast for GEA product, aimed at providers delivering IP-based TV signals to the handover point for the Openreach fibre network for broadcast. Multicasting is the ability to transmit one data stream which is then split into individual streams through the GEA access network for delivery to individual premises. This way, the need to send multiple individual streams across the network to the NGA handover locations is reduced. Openreach has increased the maximum size of its Multicast for GEA VLAN from 500Mbps to 860Mbps from the early market product. The operator says this change is ideal for customers looking to transport linear IPTV across the GEA network that are increasing their channel mix or looking at higher bandwidth technology including HD, 3D and UHDTV.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

Details of Openreach’s historic and current trials are provided in our Superfast broadband projects directory.

4.4 Cornwall passes target and begins to impact local economy

In November 2013 Openreach’s fibre-based network had passed 206,000 premises in the Superfast Cornwall project representing 82 per cent of the Duchy. This is higher than the original target of 80 per cent coverage some 15 months ahead of schedule. Over 35,000 homes and businesses have taken superfast services, including 4,130 SMEs. BT says the Superfast Cornwall project is on-track to get fibre broadband to 95 per cent of the region, as well as the Isles of Scilly by the end of 2014. The aim is also for the remaining five per cent of premises (about 13,000) to gain a boost in speeds using alternative technologies. At least 26 service providers excluding BT Retail are offering FTTC services on the Openreach network; BT Retail also provides FTTP services where the technology is available. Plusnet is currently inviting customers to trial FTTP services and business FTTP services are being sold by several providers, namely Entanet, Griffin Internet, NBS Network Solutions and Zen Internet, in addition to BT Business. Also in November 2013, the operator announced publication of independent research showing that its superfast network was providing an economic boost to SMEs in the region. Early indications from the study, claimed to be the first of its kind to explore the economic impact of fibre broadband on British SMEs, found that after 12 months 83 per cent of SMEs surveyed were saving time and money as a result of faster speeds and services enabled by fibre broadband. Fifty-eight per cent said their business is growing because of the new technology, and more than 26 per cent have either created or safeguarded jobs as a direct result of efficiency and innovation encouraged by superfast broadband. Over a third of businesses completing the survey (37.5 per cent) reported that superfast broadband had helped their business generate new sales with nearly a quarter (24 per cent) of that group pointing to new trade overseas. The Superfast Cornwall Evaluation Final Midterm Report was completed by SERIO at Plymouth University in collaboration with Buckman Associates, with survey fieldwork conducted by Marketing Means. The survey covered 88 businesses which had been connected to superfast broadband for 12 months or longer. This is estimated to represent around 11.6 per cent of the total number of businesses that have been connected for over 12 months. The survey will be repeated quarterly throughout the remainder of the project with the sample size increasing.

4.5 Northern Ireland FTTC network has over 150,000 customers

On 12 November 2013 Dundrum-based stove suppliers and fitters, County Down Stoves and Flues, was announced as the 150,000th customer on BT’s next-generation network in Northern Ireland. At that time services were available from 24 ISPs on the FTTC infrastructure providing speeds of 80Mbps download and 20Mbps upload.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

The Next Generation Broadband Project in partnership with the Northern Ireland government has resulted in 90 per cent of premises in Northern Ireland now connected to a fibre-enabled street cabinet. As in Cornwall, BT is keen to promote the benefits of superfast broadband for the local economy, commissioning research that was published back in April 2013 into the potential economic benefits for Northern Ireland’s SMEs through take-up and use of fibre. Consulting firm Regeneris concluded that an additional £750 million could be contributed to the Northern Ireland economy within the next five years through the take-up and use of fibre broadband by businesses in the region.

4.6 BT looks to raise its MDU game

BT Group’s recent announcement that it is to use an extra £50 million to target cities including bringing fibre to multi-dwelling units (MDUs) builds on the operator’s existing work in this sector. Openreach showcased one such deployment on its website in September 2013 – an installation for Gilliard Homes at the company’s New Capital Quay development in the Greenwich peninsula in South London. Here 12 blocks comprising 1,000 apartments together with a supermarket, shops, restaurants and cafes have been provided with FTTP technology. The site had been mothballed back in 2008 due to the recession and construction re-started in early 2011. The FTTP equipment for the apartments consists of four boxes – one to connect the fibre to, one for the electronics, one for the power supply and one for battery back-up. This kit is located in specially built service cupboards to be aesthetically acceptable.

4.7 Last batch of 19 exchanges quietly announced

In September 2013 it was reported that BT will enable another 19 exchanges as part of its commercial rollout, announced by the operator in a low-key manner through regional updates. These last exchanges should be enabled by spring 2014 with FTTC technology. Coverage areas serve around 195,000 premises in total, although there is no detail on which cabinets will be enabled on these exchanges. It was also reported that an extra 250,000 premises will benefit from infill work in 293 exchange areas, with cabinets missed out in the initial rollout being enabled under the commercial programme. This follows the network operator’s announcement in July 2013 that nine additional exchanges would be enabled for FTTC services, covering around 58,000 homes and businesses, and that infill work would also be carried out on exchanges already offering FTTC services, with cabinets covering about 78,000 premises having a fibre twin added. Table 3 provides the historic list of exchange enablement announcements. Not all announcements have given details of premises passed; hence there is a shortfall in the final total figure. Also in practice exchange numbers fluctuate between the different phases with individual exchanges moving from one to another. Some are upgraded earlier or later to fit in with practical deployment considerations or to provide flexibility in the programme in the face of weather issues in particular.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

Table 3: Openreach exchange enablement announcements

Original Phase Exchanges Claimed In Mixed FTTC/ Notes announce- premises service FTTP ment date passed date exchanges

Oct-08 PTTC pilot 3 Not quoted July- sites 09/Oct- 09

Mar-09 2 28 500,000 Apr-10

Jul-09 3 69 1,000,000 Sep-10

Jan-10 4a 63 1,000,000 Sep-10

Mar-10 4b, 5 303 3,500,000 Sep-11 75

Sep-10 6 159 Not quoted Dec-11 45

12/01/2011 7a/Market 41 300,000 Mar-12 16 In rural market Towns towns

07/04/2011 7 156 1,500,000 Majority 17 mixed, 6 Includes 10 by end FTTP only under CP Dec nomination 2011, programme balance from BT Retail's by end "Race to 2012 Infinity" campaign

14/06/2011 Phase 7 66 Not quoted Majority unknown Announced 66 update by end new exchanges

Dec in addition to 2011, phase 7 balance announcement by end in April 2011 2012

13/09/2011 Phase 8 114 1,000,000 Autumn 1 FTTP 2012

Northern 166 Not quoted Ireland

Cornwall 100 Not quoted Includes 1 exchange on the Iles of Scilly

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

FTTP pilot 4 Not quoted FTTP only Four specifically sites except for announced; York with now includes FTTC/FTTP mix nine sites where early market deployment of FTTP product available

12/12/2011 Phases 8a, 161 1,800,000 2012 FTTC 178 announced 8b and 9a including 17 in Cornwall as part of the Superfast Cornwall project

20/03/2012 Phase 9b 73 705,000 Late FTTC 2013

26/06/2012 Phase 10 98 800,000 Late unknown 2013

26/09/2012 Phase 10b 163 1,000,000 2013 unknown

12/02/2013 Phase 11 99 600,000 Spring FTTC 2014

23/07/2013 Extra 9 58,000 Spring FTTC 2014

24/09/2013 Extra 19 195,000 Spring FTTC Low-key 2014 regional announcements

Total 1,722 12,958,000*

* Not all announcements have detailed premises passed figures, meaning a shortfall in the final total figure – the commercial programme is due to cover 19 million premises.

An additional 928,000 premises will be fibre-enabled using infill work.

4.8 BT Retail sees strong fibre-based growth

BT Retail reported around 1.9 million customers as of 31 January 2014, having gained 228,000 net fibre adds during the last quarter of 2013 – its best ever quarter for superfast additions, up by 14 per cent. In terms of marketing, the service provider has been offering Infinity products with a £50 Sainsburys’ gift card since late 2013.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

5. Virgin Media increases the speed stakes

Virgin Media has a total 3.2 million customers now taking superfast broadband services of 30Mbps or above, representing 74 per cent of its broadband base. This is an increase of one million in 12 months, including a 209,300 rise during the last quarter of 2013. The cable operator says it continues to see nearly half of its new internet customers subscribing to speeds of 60 Mbps or higher, showing strong ongoing demand for faster speeds. The operator continues to expand its Docsis fibre coax network passing 12520,100 homes at the end of December 2013, an increase of 48,300 during the year. Virgin Media is now focusing purely on its cable network now with news reports it will no longer provide ADSL-based services to new customers. This is its so-called National Broadband service based on the Vodafone’s (ex CWW) LLU platform and BT Wholesale outside this footprint.

5.1 Higher speed services and boosts for existing customers

The cable operator continues to push the speed agenda stating on 11 November 2013 that it would be launching a 152Mbps service from February 2014 across its network. It will also be boosting speeds for existing customers by at least 20Mbps depending on their current service.

5.2 Virgin acquires Smallworld Fibre

On 3 February 2014 Virgin Media announced it has acquired Smallworld Fibre for an undisclosed amount. Smallworld’s fibre-optic network currently passes 40,000 homes, delivering top broadband speeds of 100Mbps, cable TV including over 100 channels, and landline phone services to customers in Irvine, Dreghorn, Troon and Kilmarnock as well as Carlisle, Lancaster and Morecambe.

Virgin Media plans to connect Smallworld’s network to its own superfast infrastructure. Along with WightFibre, Smallworld Fibre was the only independent cable network operator left in the UK. It upgraded its network to Docsis 3.0 some years ago and has been offering superfast broadband packages of 25Mbps, 50Mbps and 100Mbps for some time. This means that WightFibre on the Isle of Wight is the last independent cable provider remaining from the 1980s cable franchise programme designed to rollout cable TV across the UK. Our Superfast broadband projects directory provides historic details of Virgin Media’s pilots, trials and partnerships in next-generation network deployment.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

6. Altnets move into make or break year

2014 will be a pivotal year for the UK altnets. Some will fall by the wayside. The big alternative network operator news is of course the death of Digital Region declared in August 2013 and although no switch-off date has been given, existing end user customers were reportedly being contacted by their ISPs regarding options. Other casualties include the FTTH project in Selling, Kent, by Internal Communications Systems Ltd which was meant to serve around 200 premises. This will be switched off in May 2014 and is currently believed to have 13 customers on, down from 39 at its height. Fibrewave, which had plans for an FTTH network covering the communities of Earith, Bluntisham and Colne in Cambridgeshire, has halted its plans due to the deployment of next-generation infrastructure by Openreach in the area. Others, however, appear to be getting into their stride in niche markets, such as Hyperoptic in urban MDUs or Gigaclear providing FTTP networks in rural areas sometimes funded by the communities themselves. Meanwhile a number of new residential and business providers are emerging from the student accommodation sector. Ask4 and Velocity1 we have featured in the past; Cablecom with a strong track record in the student market is now appearing as the infrastructure deployment provider behind several new network and service providers including FizzyLiving and Community Fibre. Another new player with an experienced operator behind it is TripleConnect with a new build deployment in Cumbria. Cable operator WightFibre Limited is using the TripleConnect brand to focus on the new build sector. Indeed Cumbria has seen two further fibre developments mushroom in the past six months provided by alternative operators – an FTTP initiative by wireless network provider LonsdaleNET and the connection of Cybermoor’s FTTP deployment in Alston Moor with backhaul provision now in place. Our Superfast broadband projects directory, also published this month, lists the country’s alternative network fibre-based projects.

6.1 CityFibre floats on AIM

CityFibre has seen a busy past six months culminating on 17 January 2014 when CityFibre Infrastructure Holdings plc, or CityFibre, shares began trading on the AIM market of the London Stock Exchange raising around £16.5 million before expenses through the issue of Ordinary Shares. This gave the group a market capitalisation of approximately £31.4 million at the issue price. Proceeds of the funds raised will be used to expand the group’s fibre-optic networks and to deploy infrastructure in selected regional cities either through the construction of new networks or via acquisition of existing fibre infrastructure. On 13 November 2013 the network operator signed a partnership agreement with Peterborough City Council following the October 2013 announcement of its intention to privately invest up to £30 million in the city. CityFibre said it had identified Peterborough as an excellent candidate for its Gigabit city vision due to the city’s recent business growth – it had a record 1,400 SMEs launched in

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2012 – and hunger for innovation supported by a forward thinking local authority. The rollout was due to begin in spring 2014 and should see 90km of core fibre infrastructure deployed throughout the city to pass at least 80 per cent of businesses. This first phase was expected to be completed within 18 months. The CityFibre model is to provide fibre networks for service providers delivering connectivity services to local government, businesses and consumers as well as to mobile operators requiring fibre base- station connectivity to enable 4G services. It also has a partnership with the City of York to provide this approach eventually rolling out FTTH infrastructure to 80,000 homes. Also in November 2013 CityFibre’s service provider Gigler launched its Gigler Business service aimed at SMEs and providing up to 1Gbps download and 500Mbps upload speeds. The service had been trialled with a number of businesses in Bournemouth. Gigler Business providing 1Gbps/500Mbps with a 500GB usage allowance is available at £50 per month and Gigler Business Pro with a 1TB usage allowance costs £95 per month. Both packages have a 12-month contract and require a £100 connection charge. There is no line rental and a business-grade wireless router is supplied. November 2013 also saw CityFibre and Ask4 sign a wholesale partnership agreement to extend rollout of ultrafast gigabit-speed connectivity. The agreement will see CityFibre added to Ask4’s Strategic Supplier list, enabling Ask4 to offer ultrafast, gigabit-speed internet services over CityFibre’s infrastructure to its business, student residence and MDU customers. Other news includes that on 24 September 2013 when the company announced the appointment of Peter Manning as Chairman. Manning is also Chairman of Marston Group and former CEO of Colt Telecom, and joined the CityFibre Board immediately to support CEO Greg Mesch. Meanwhile in Bournemouth, where it has the FTTH network passing 21,000 premises that it inherited from FibreCity, in conjunction with Gigler, CityFibre trialled a fibre-powered free public WiFi service in September 2013 during the four-day Bournemouth Air Festival. The service was used by over 4,000 people with users reporting speeds in excess of 30Mbps on their mobiles and at 140m from a base-station; average access speeds were at 19Mbps download and more than 15Mbps upload speed. CityFibre says it now has almost 30,000km of fibre in the ground, connecting more than 350 sites and data centres across the UK, and claims to be the country’s largest independent provider of fibre to secondary cities.

6.2 Gradwell launches GigaBath based on CityFibre infrastructure

On 30 January 2014 Gradwell Communications announced the launch of GigaBath, a fibre-optic network in Bath City Centre. Gradwell leases fibre from CityFibre to provide connectivity to businesses located in an area covering an arc from James Street West, through Charles Street, Chapel Row, Queen Square, Gay Street, Barton Street, George Street, down Broad Street and across Westgate Street. Further spurs will then cover Walcot Street, the Tramshed and Beehive Yard; Great Pultney Street; and the Circus round to Brock St. Customer demand will determine the next areas to be connected. The first phase of the network is already live, connecting the Guildhall Co-working Hub, with the plan being to enable the remaining network within 90 days of securing an initial 50 customers. A 1Gbps

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connection costs £300 per month with a set-up fee of £250. The price will vary according to contract length, level of assured bandwidth and the number of static IP addresses required. The basic service gives a guaranteed bandwidth of 5Mbps, with extra assured bandwidth costing £100 per month per 20Mbps increment. Gradwell is planning to hold a launch event on 10 February 2014.

6.3 IFNL continues to build homes passed numbers

In January 2014 the number of residential customers served by ISP seethelight on Independent Fibre Networks Limited’s (IFNL) network was 5,780 up from around 5,086 almost a year ago. Homes passed numbered 7,180, up by over 1,000 year-on-year. Business connections with seethelight totalled 160 while wholesale residential and business service connections provided by IFNL to other service providers numbered 144. The company, part of Inexus Group, which is now owned by Brookfield Infrastructure, also the owner of GTC, a leading independent infrastructure utility provider in the UK, is currently contracted to deliver services to 33 sites across the UK. A number of sites are still in the planning or ground works stage. Services are provided by seethelight, an ISP also part of Inexus Group, and now include a package offering broadband speeds of 300Mbps/30Mbps with voice provision in addition to the existing products of 25Mbps data only, 50Mbps/10Mbps and 100Mbps/20Mbps both with voice. IFNL itself provides wholesale services to service providers which vary from 10Mbps up to 1Gbps.

6.4 Hyperoptic launches in Olympic Village

In December 2013 Hyperoptic announced the first residents had moved into East Village in Stratford, the former Athletes' Village, with access to its superfast FTTH broadband service. In addition, all the private rental residents at the East Village homes managed by Get Living London are being offered free 20Mbps fibre broadband service from Hyperoptic as part of a number of amenities announced by the company. The package includes a phone service with free local and national calls during evenings and weekends. Residents can upgrade to Hyperoptic's 100Mbps or 1Gbps services for the discounted price of £10 or £20 a month respectively on a 30-day rolling contract. The selection and installation of Hyperoptic's fibre broadband is part of a larger solution within East Village designed by technology provider Fifosys Get Living London.

Hyperoptic has also been active in the Government’s Connection Voucher Scheme announcing on 5 August 2013 that it had become a registered partner and would be supporting the scheme in three of the four test cities – Cardiff, Edinburgh and Manchester – by offering a 100Mbps leased line product from £250 per month.

There has also been an addition to the Hyperoptic team. In September 2013 Hyperoptic appointed a new Director of Sales, Per-Gunnar Ostby, previously with Quest Software and prior to that responsible for sales and products at Be Unlimited, the consumer broadband start-up founded by Hyperoptic's Chairman Boris Ivanovic and Managing Director Dana Tobak in 2005 and sold to O2 in

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2006. This followed May 2013’s equity investment commitment of £50 million led by Quantum Strategic Partners Ltd and an appointment in June 2013 of the company’s first Head of Property.

For further details on Hyperoptic see Point Topic’s case study, Hyperoptic: a new breed of fibre provider, published in February 2013.

6.5 Venus welcomes Connection Voucher Scheme

Another operator involved in the Connection Voucher Scheme is Venus Communications. Focused on business provision but with a residential fibre deployment at Riverside One in Battersea, London, Venus had 16 multi-tenant properties on its network including three new sites with 20, 30 and 40 business units in January 2014. The total addressable tenant base of this is 200 businesses.

Venus believes that the Connection Voucher Scheme is “the most significant news in the UK business fibre industry this decade” and that at least 30 million businesses will benefit from the BDUK investment, with 25 per cent of the funds going to London. Venus has participated in the scheme from the beginning in the pilot boroughs of City of Westminster and City of London and is seeing an uplift in orders, with businesses taking up fibre offers that were previously too expensive to consider.

In terms of fibre rollout, Venus says it has almost doubled in size, with contracted revenues and customer base also doubling in the last financial year. Venus has added six data centres to its Docklands data centre footprint, offering wholesale interconnect opportunities to most of the UK's carrier market. It is also adding six new London PoPs to its fibre network, bringing coverage to around 30,000 additional London postcodes representing an increase in geographic coverage of over 50 per cent. New coverage areas include North London (Euston and Camden), North West Central areas (Paddington and Marylebone) and South West Central (Whitehall and Westminster).

6.6 Community Fibre in Westminster pilot

Another city-based player, Community Fibre, is working with Westminster City Council and CityWest Homes to bring fibre to homes in Westminster. In January 2014 it had already launched in four CityWest Homes properties – Norfolk House, Jessel House, Probyn House and Schomberg House – and plans to roll out to other CityWest Homes properties soon. The service provider has a “launch pad” demonstration centre at which residents can see the services on offer. It is currently piloting the service with Westminster Council in the four properties that provide social housing listed above and says it is looking to expand to more social housing and also private and business deployments.

6.7 Velocity1 uses Wembley to showcase the bigger picture

Also in the urban arena, the nature of Velocity1’s live deployment in Wembley is changing rapidly. As well as providing residential superfast broadband connectivity the company is deploying fibre and fibre-backed WiFi for a number of uses. Event-based WiFi is provided to NFL games held in Wembley

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stadium and to fans; also to NFL to operate over 50 retail points for its merchandising village at the event, and free TV over WiFi. The operator, owned by Ireland’s Magnet, is also providing business-to-business connectivity to the London Designer Outlet and voice and data over fibre to some of the big retail brands based there. Wembley shopping centre is provided with WiFi and a full suite of analytics for big data is provided to the management firm – this covers who visits, their profiles, how they move around the stores. In addition Velocity1 has connected car park barriers in the London Designer Outlet and Wembley area to enable number plate recognition and is combining this with the WiFi data in order to see the socio-economic profile of who shops at the centre using licence plate data to capture make and age of cars. Digital signs in Wembley have been linked by fibre and the next step is to compute car park and WiFi data to deliver real-time user based adverts to consumers. In early January 2014 the company was rolling out WiFi across the entire site around Wembley stadium with capacity for 15,000 concurrent users. It is running the service from lampposts connected via fibre. Developer Quintain is also due start building eight new apartment blocks in Wembley in March 2014 to which Velocity1 will provide broadband service. According to the operator Wembley is now a fully profitable and cash generative FTTx business, and it plans to leverage the deployment as a showcase more broadly across the UK and internationally.

6.8 Call Flow Solutions continues private and publicly-funded rollout

Turning to the rural sector, Call Flow Solutions is four months into an eight month project to provide sub-loop unbundled (SLU) and wireless broadband networks to four new areas in Kent – Goudhurst, Lydd & Greatstone, Godmersham & Crundale, and Lympne & Stanford – by summer 2014. With the first cabinet going live in early January 2014, the company has received funding from Kent County Council of around £0.5 million which has received State aid clearance. The operator is also privately investing in the installation of 20km of fibre in south east Kent which will pass 5,000 premises. Point Topic estimates the company already passes 4,000 premises with its SLU networks and a further 4,000 with wireless infrastructure. Call Flow Solutions has a number of deployments in Kent and East Sussex. In recent years the operator has carried out a mixture of public and privately-funded network deployments, and has set up a separate internet service provider brand, Whippet Internet, in order to promote its SLU deployments and offering. The ISP provides download speeds of up to 80Mbps as well as secure cloud back-up services and radio broadband. Call Flow Solutions is also working with the Diocese of Canterbury, putting radio masts onto church towers for broadband provision.

6.9 Fibre Options seeing increasing developer interest

For Fibre Options connections numbers have remained steady since our last update. It is working with the Joseph Rowntree Housing Trust on a new home development at Derwenthorpe near York where the operator had FTTH 60 live connections with 64 premises passed as of July 2013. Derwenthorpe is due to expand to a total of 540 homes with phase two comprising 130 homes

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currently under construction. The Derwenthorpe development ground to a halt at the back end of 2012 but is now forging ahead with Phases 2, 3 and 4 with further connections expected to be made in February 2014. Fibre Options is also working with the Overbury Estate in Gloucestershire where around 30 properties are now connected to its FTTH network with up to 90 premises passed. More connections are planned in spring 2014. The company has new sites planned and is looking to June or July 2014 for the first connections here Generally it says that interest is coming from developers, with them adding broadband into the list of other utility elements such as energy or TV provision. Currently Fibre Options is also a service provider but it would like to open up its networks to others; scale however is still required.

6.10 Gigaclear continues to grow rural footprint

Gigaclear’s latest announcement on network coverage was made on 5 November 2013 with its plans to pass 1,500 homes and four business parks in Farmoor and Stanton Harcourt in Oxfordshire, and Underriver and surrounding villages in Kent. Construction work got underway in Farmoor in November 2013 and work in Stanton Harcourt commenced in December 2013. Underriver in Kent was expected to commence in January 2014. The operator now owns and manages six networks in Kent, Oxfordshire and Rutland, and plans to have 30 networks in operation by the end of 2014. It has announced plans to complete three more FTTH networks in spring 2014. Once these new deployments are complete, Gigaclear will have invested some £2 million in Oxfordshire, £1 million in Rutland and a further £1 million in Kent. Its order book looks healthy with around 400 communities requesting Gigaclear’s presence. By the end of December 2013 the operator passed around 2,000 properties, a figure it expects to rise to 12,000 by the end of 2014. The take-up rate for broadband services was running at around 40 per cent in early January 2014. On 24 January 2014 Gigaclear stated that it would not be investing in a new network in South Wiltshire and West Hampshire following an announcement by Wiltshire Council that it will be applying public funds to BT’s FTTC installation in PItton, Farley, East and West Grimstead and Winterslow. This means that Gigaclear’s plan to cover these communities no longer make commercial sense for its investors. The Gigaclear registration campaign had been well supported by local residents with several hundred confirmed orders achieved. Further details on Gigaclear can be found in our case study, Gigaclear: bringing FTTP to rural UK, published in December 2013.

6.11 B4RN sticks to its coverage plans

Broadband for the Rural North (B4RN) in Lancashire was connecting around 30 to 50 homes to its network each month in January 2014. Wray is the latest community to have been reached by the FTTH network which had reportedly connected nearly 350 properties in November 2013, up from 135 in July 2013. Wray should provide a large customer base with around 500 to 600 people living

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there. The communities of Arkholme, Quenmore, Abbeystead and Newton all have live customers and the fibre route to Gressingham from Arkholme has been finished. Coverage plans have expanded with the project expected to provide fibre to a possible 5,000 properties eventually. Current plans take the network to 4,000, up from the originally planned 3,200. This expansion includes a 450 home property development at which the developer is putting in ducting for B4RN to lay fibre in. In January 2014 there were reports that BT was planning to roll out FTTP to Dolphinholme as part of its partnership with Lancaster County Council to extend fibre to 97 per cent of premises by the end of 2015. B4RN reportedly noted that its plans to build an FTTH network in the community long preceded any published plans by BT to rollout out FTTP network in the same area and that this brings the subject of overbuild into play. However, B4RN’s deployment is well advanced in the village with plans dating back to 2011 and deployment will continue. Indeed it notes the choice of two FTTP providers will be a good thing for residents. B4RN is also one of a number of communities waiting to hear the outcome of its application for a RCBF grant, expected at the end of February 2014.

6.12 Cybermoor FTTP services go live

In Cumbria one of the pioneers in rural broadband, Cybermoor, has made fibre broadband connectivity available to all 300 properties in Alston Moor after putting backhaul provision in place. Cybermoor laid a high-speed fibre-optic cable between Alston Town Hall and Nenthead Primary School and has connected homes and businesses in central Alston to the network. It is early days in terms of marketing the service but live connections numbered around 20 in January 2014 including several businesses. Packages are available at 25Mbps and 10Mbps speeds. Cybermoor is a community owned co-operative and also provides a Wi-Fi broadband network for Alston Moor and the surrounding areas. It has upgraded wireless services covering Alston, Garrigill, Nenthead, Slaggyford, Carrshield, Ninebanks and Lambley to offer faster speeds and greater reliability.

6.13 LonsdaleNET launches fibre network in Cumbria

Also in Cumbria, it was reported in September 2013 that LonsdaleNET, better known as a wireless broadband provider, had begun offering FTTP broadband services to Melkinthorpe in Cumbria. Service packages including a lite service with a 10GB allowance for £19.95 a month, or an uncapped 1Gbps service for £29.95.

According to reports, Earl of Lonsdale, owner of the Lonsdale Estate, is the company’s main investor. He decided to tackle the problem of poor rural broadband after struggling with slow connections for years. The company was created from the Cumbria assets of NextGenUs, which went into administration in April 2012. It is financed by Lord Lonsdale and uses former Three UK mobile phone masts as the hubs of its service, underpinned by a dark fibre link to Manchester. Coverage is the Eden Valley with plans to expand into other areas of Cumbria.

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6.14 TripleConnect in Cumbrian new build fibre deployment

A third fibre initiative in Cumbria was reported in November 2013 in the new development of 850 homes near the M6 and Carlisle city centre. The Crindledyke Farm new build estate will have an FTTH network providing 1Gbps services from Solway Communications and TripleConnect. According to Story Homes, the housing developer, this is the first time that it has been able to offer such a service on any of its developments and feedback from customers has been positive. The network is proving an additional selling point for its homes. Behind the TripleConnect brand is Wightfibre Limited, which already provides phone, TV and broadband services to over 5,000 customers around the UK using a mixture of Docsis and fixed wireless. It is also reportedly deploying FTTP for one new housing development on the Isle of Wight. TripleConnect is the business focused on new residential developments. Solway Communications has traditionally been a fixed wireless network provider. According to TripleConnect, the development is in its early days with 20 to 30 homes complete in January 2014. Each new home has fibre pre-installed as it is built so the rollout will follow the build. Broadband speeds of up to 1Gbps are offered and the standalone price of the 1Gbps package is £100 per month. There are a variety of different packages and bundles ranging from the 30Mbps Fibre package at £27.50 per month when taking line rental and including Evening & Weekend calls, or £32.50 for a standalone broadband package with set-up fees of £150. TV options are also available.

6.15 KC fibre connections approach 7,000 lines

Although not technically an alternative network operator, we also cover the activities of KC in this section, the incumbent in Kingston upon Hull. At the end of December 2013 KC had passed 27,879 properties of which just over 24,800 were residential with its predominantly FTTP rollout. This is up from a total coverage of 20,300 premises at the end of June 2013. Connections totalled 6,980 at the end of 2013, of which 678 were for businesses. Again this is up on the mid-2013 figure of 4,200 live connections. In its interim results briefing on 26 November 2013 KC reported a continued strong take-up of fibre- based services, with 24,700 premises passed and 5,900 customers taking its Lightstream package at the end of September 2013. The operator has launched a high definition Smart CCTV service, enabled by the capability of high- speed fibre, where footage is uploaded to the cloud allowing customers access to secure, real-time and recorded footage. The operator is also exploring a number of wider opportunities for ‘over the top’ services leveraging its Lightstream service, which offers guaranteed download speeds that include 100Mbps and a 350Mbps offering.

On 25 September 2013 KC announced that fibre deployment in streets around Newland Avenue and Beverley Road were the latest to have access to its superfast fibre broadband service. At that time the service was available to more than 20,000 properties in locations including Kingswood, Greatfield estate, Victoria Dock, Beverley, and Swanland. Earlier in September 2013 KC connected its 5,000th customer to the service.

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Also in September 2013 the operator announced that six local student accommodation providers had signed a deal with KC to install fibre broadband in their properties. Between them Kexgill Student Accommodation, Accommodation Warehouse, MyPad Accommodation, Wardbright Accommodation, PD Properties and Longman Jones provide accommodation for thousands of University of Hull students. The deal means 500 of their properties will be equipped with KC’s Lightstream service. These are located in the streets around Newland Avenue.

Further details of KC’s approach to fibre deployment are available in KC fibre rollout: taking the local approach, published in February 2012.

6.16 The closure of Digital Region

Finally on 15 August 2013 Digital Region’s shareholders announced the closure of the network, halting their search for a private sector partner following increased uncertainty and risk around compatibility of future funding with EU State aid rules. Users were reassured that services would not be disrupted and that they would be contacted in due course by their internet service provider and will be supported over the coming months to switch to alternative service providers to avoid any disruption to services. Barnsley, Doncaster, Rotherham and Sheffield councils – along with major shareholder, the Government’s Department for Business, Innovation and Skills (BIS) – agreed that a managed closedown of the network and migration of existing Digital Region Limited customers to alternative networks offered the most cost-effective deal for the public. The estimated cost of continuing with the project would be an estimated £95.8 million. Closure of the network would save the taxpayer an estimated £12.5 million, and potentially more, subject to negotiations with existing contractors and customers. Shareholders have been firmly focused on using Digital Region Limited (DRL) to achieve a significant increase in superfast broadband coverage across South Yorkshire to ensure economic competitiveness did not fall below other parts of the country. This has now largely been achieved by investment by other providers and shareholders had embarked on a re-procurement exercise in March 2012 to facilitate the commercial transfer of the network to another provider. Until this point, the costs of closure and the costs of continuing with the project and realising additional benefits for residents and businesses of South Yorkshire were finely balanced. In a further move a notice dated 18 September 2013 on the Digital Region website announces that, “Notice is hereby given by the Board of Digital Region Limited of the sale of the primary assets, in whole or in lots, with or without the customers of the business, including the following: - A fibre-to-the-cabinet network utilising more than 1300+km of fibre optic ducting (c.545km of which is DRL owned duct, the rest being leased via 3rd parties) - Deployed across 36 BT exchange areas and 1359 DRL owned street cabinets in the South Yorkshire region covering 80% of all premises. - An existing customer portfolio of 6 Internet Service Providers (ISPs) and 4 local authority councils providing services to 3367 end points.”

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Recent reports suggest that the network is still in use and no switch-off date has been provided. Some retailers are reportedly helping customers to make arrangements to move to other broadband solutions. The network covers 440,000 homes and 40,000 businesses, which was always the target intended in Digital Region’s first phase. Point Topic estimates that the operator’s coverage of 80 per cent of the PCPs the network is in equates to 391,000 premises in South Yorkshire representing 63 per cent of the region. There were six active ISPs – Digital City Region and Central Technology (via the Fluidata platform) in addition to Ask4, Littlebigone Origin and Fluidata, the latter providing access to its wholesale platform used by up to 50 ISPs. There were reportedly 3,000 customers on the network although Point Topic estimates there were 3,750 customers at the end of June 2013.

6.17 Student fibre sector is a springboard for the wider market

Although deployments in the UK’s universities are not covered specifically by this report it is becoming clear that several alternative fibre operators are emerging from this market to the wider residential and business sectors. A number of companies are involved in the student accommodation sector. Cablecom is one of the leading providers in the student market with 200,000 students on its networks and contracts including that with Unite, one of the leading commercial student accommodation providers. Cablecom has two brands – StudentCom addressing the student sector and LivingCom focusing on the residential and keyworker markets. It is behind deployments in Salford’s MediaCity development and as mentioned above FizzyLiving, an apartment provider in London. It is also involved with Community Fibre’s deployment in Westminster. Other major providers to the student market include Ask4, SDC Group and Velocity1.

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7. Government says Superfast Britain is on track

After rethinking and revision during 2013 the Government’s Superfast Britain programme run by the Department of Culture, Media and Sport (DCMS), now comprises three elements:

£790 million to extend superfast broadband to 95 per cent of the UK by 2017 £150 million to provide high-speed broadband to businesses in 22 cities £150 million to improve quality and coverage of mobile phone and basic data network services. DCMS’ latest Broadband Performance Indicator published on 28 January 2014 estimates that at the end of 2013 the number of premises benefiting from superfast broadband as a result of the programme had almost tripled since September 2013 to 273,731. Table 4 provides the cumulative total. It was also reported that half the local authority BDUK projects across the UK have live cabinets and that approximately 1,000 cabinets have gone live around the country. Many projects were ahead of schedule and 10,000 premises per week were gaining access to superfast broadband, which was predicated to increase to 25,000 per week in spring 2014, ramping up to 40,000 per week by summer 2014. Table 4: Cumulative total BDUK spend

Cumulative to end of: Premises with superfast BDUK funding (£) Number of premises broadband service made covered per £ million of available broadband delivery programme expenditure

December 2012 254 £434,735 584 March 2013 16,638 £6,767,185 2,459 June 2013 38,343 £6,767,185 5,666 September 2013 111,968 £10,347,568 10,821 December 2013 273,731 £14,182,547 19,301

7.1 New £10 million fund for alternative technology providers

On 15 January 2014 Culture Secretary Maria Miller announced that a £10 million fund will be available to alternative technology providers who come forward with innovative ideas to help superfast broadband reach Britain’s most remote communities. The Government says that its broadband programme is on track to deliver superfast speeds to 95 per cent of the UK by 2017, and that indeed it is not only well underway but current progress is exceeding expectations. Hence the focus is now shifting to the hardest and most remote five per cent of premises in Britain. The new £10 million fund will open on 17 March 2014 to enable a range of pilot projects to be undertaken. Local authorities are being asked to offer support to these projects and potential technologies that could be piloted include:

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Using 4G mobile signal to deliver fixed wireless superfast broadband Using fibre direct to premises Taking fibre from broadband cabinets to a distribution point further down the network, increasing speeds by reducing the reliance on copper Satellite technology. Suppliers will be able to bid for funding and will need to provide a description of their proposed project, including the costs and the outputs. BDUK will evaluate proposals on the basis of criteria such as the quality and prospect of solutions able to scale to address the final five per cent, for the timeliness and usefulness of the learning that the projects provide, and the level of funding requested.

7.2 New BDUK chief takes the helm

The new fund announcement coincided with the appointment of a new Broadband Chief Executive, Chris Townsend, who was Commercial Director of the London Organising Committee for the Olympic and Paralympic Games. Townsend replaces civil servant Robert Sullivan at BDUK on 1 April 2014 and will administer Superfast Britain on behalf of the Government, including the latest fund. His commercial experience is said to be a key factor in his appointment. Sullivan's job was advertised in October 2013, a month after the BDUK project to expand superfast broadband to rural areas was heavily criticised as "mismanaged" by MPs following a parliamentary committee investigation and hearings. The project was said to be nearly two years behind schedule, with the taxpayer likely to bear a larger share of the costs than originally planned.

7.3 DCMS commissioned report on the benefits of broadband

According to a report published on 14 November 2013 and commissioned by DCMS, for every £1 the Government is investing in broadband, the UK economy will benefit by £20. The UK Broadband Impact Study by SQW Group concludes that the availability and take-up of faster broadband speeds will add about £17 billion to the UK’s annual Gross Value Added (GVA) by 2024. This is an unusually high level of return for public funding, but SQW considers it to be realistic given that broadband has an increasingly critical role in the day-to-day operations of the majority of UK businesses. The report does not include any impacts associated with further interventions resulting from the Government’s announcements in July 2013 on extending superfast broadband to 95 per cent of premises by 2017. In terms of social impact, the report concludes that the interventions currently underway will have a material impact on reducing the digital divide for both households and businesses. Although many of these social impacts are impossible to forecast with any degree of confidence, the study quantified some associated with changes in teleworking, estimating that the increase in teleworking facilitated by faster broadband will save about 60 million hours of leisure time per annum in the UK by 2024 of which about 10 million hours are attributable to publicly funded intervention. By avoiding commuting costs, the additional teleworking enabled by faster broadband will lead to total household savings rising to £270 million per annum by 2024, £45 million of which are attributable to intervention.

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In terms of environmental impact the study concludes that faster broadband will account for about 1.6 million tonnes of carbon dioxide equivalent savings per annum by 2024. This is equivalent to about 0.3 per cent of the UK’s current greenhouse gas emissions.

7.4 Rural Broadband Fund contracts in the delivery stage

By the end of December 2013 all English local authorities using the Rural Broadband Fund had signed contracts with BT and according to DCMS’s Google Spreadsheet, all were in delivery as were contracts for Scotland and Wales. Northern Ireland was still at the procurement stage. Table 5 below lists links to local authority and devolved nations’ broadband websites. Further details are also available by initiative in our Superfast broadband projects directory. Table 5: Status of Rural Broadband Fund projects, end-December 2013

Devon & Somerset Oxfordshire Wiltshire, South Gloucestershire Nottinghamshire, City of Nottingham Highlands and Islands Berkshire Councils Lancashire, Blackpool, Blackburn with Darwen Derbyshire Rutland East Riding of Yorkshire North Yorkshire, York West Yorkshire Wales Worcestershire Surrey Leicestershire, City of Leicester Cumbria Merseyside Herefordshire and Gloucestershire Central Beds, Bedford Borough, Milton Keynes Norfolk Essex, Southend-On-Sea, Thurrock Suffolk Isle of Wight Cambridgeshire, Peterborough Newcastle upon Tyne Lincolnshire Greater Manchester Northamptonshire North Lincolnshire, North East Lincolnshire Kent and Medway Buckinghamshire, Hertfordshire Hampshire Coventry, Solihull, Warwickshire Shropshire Dorset, Bournemouth and Poole Northumberland Staffordshire and Stoke-on-Trent Durham, Gateshead, Tees Valley and Sunderland East Sussex, Brighton and Hove Cheshire Councils Scotland West Sussex Northern Ireland Source: DCMS/Point Topic

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8. Slow going for the RCBF

Since our last report in August 2013, discontent over the allocation of funds (or lack of) under the Rural Community Broadband Fund (RCBF) has continued, with both BT and local authorities being blamed in turn by various parties for failing to publish detailed information on the location of county Rural Broadband Fund deployment in order that groups looking to gain RCBF funding can identify their areas as being excluded. In November 2013 the Independent Networks Co-operative Association (INCA) made a statement responding to the apparent refusal of funds to two community-led projects – Cotswolds Broadband in Oxfordshire and Trailways in Dorset – saying that, “the current state of affairs is becoming increasingly untenable” and that “alternative providers and local communities are frustrated by the secrecy.” Cotswold Broadband is continuing to look at possible funding mechanisms and is still working with both BDUK and DCMS to help them find ways to support it and other projects. In September 2013 Worcester County Council was working with five communities on RBCF funding. Berkshire County Council has also applied for funding on behalf of a number of communities. Nevertheless Point Topic knows of at least five communities that had been allocated RCBF grants at the time of writing – Fell End, Fibre GarDen, Noke, Northmoor and Rothbury.

8.1 Fell End completes first phase

As of 3 January 2014 phase one of the Fell End project had been completed with fibre to 15 homes expected to be lit by the end of the month. The intitiative is designed to put fibre into this remote community of 58 premises spread across an 11-kilometre area. Ravenstonedale Parish Council has raised around £34,000 locally towards the scheme, together with additional funding from the Prince’s Countryside Fund, The Holehird Trust, TalkTalk Digital Heroes and BT. The Fell End Rural Community Broadband Project at Threlkeld in Cumbria was reported in September 2012 as the first rural community to receive a RCBF grant during summer 2012.

8.2 Fibre GarDen to work with ITS Technology Group

Also in Cumbria, the Fibre GarDen Community Broadband project in Garsdale has received RCBF approval. Digital Dales (UK) Limited, trading as Fibre GarDen, is a community cooperative which has been working for the past three years towards securing the provision of superfast broadband by delivering FTTP to every property throughout Garsdale and Dentdale in Cumbria – to connect 525 premises with superfast broadband using funding of £157,500. In December 2013 following a procurement process Fibre GarDen and ITS Technology Group (ITS) announced that they had signed a Memorandum of Understanding to deliver the FTTP project.

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On 6 January 2014 Fibre GarDen stated that the project had raised £155,000 in funds from a share offer to the communities of Garsdale and Dentdale. ITS Technology Group will contribute a further £70,000 to complete the funding. This means that the finance required to build a superfast fibre-optic network throughout Garsdale and Dentdale has been raised and Fibre GarDen is in a position to proceed. The next phase will be to complete discussions with DEFRA and the Connecting Cumbria Project in order to sign-off contracts and confirm a build programme. At the end of July 2013 the group was successful in its funding application to the Social Investment Business Group (SIB). This funding, part grant and part loan and subject to due diligence, equates to approximately £200 per property in the two Dales and brings the total funding raised so far to £435,000 for network build. In addition to this the group had previously raised some £28,000 to cover start-up costs. The group has also made a request for funding the Venture Capital Fund.

8.3 Noke issues State aid consultation document

The Noke project in Oxfordshire aims to deliver superfast broadband to 61 premises by 2015 including three businesses. The RCBF is supporting the project with a grant of £83,000 and State aid public consultation document was issued on 12 December 2013. Completion of the project is planned by March 2015.

8.4 Northmoor plans April start

At the end of December 2013 the Northmoor, Moreton and Bablockhythe Community Broadband Project in Oxfordshire announced it had secured £200,287 in RBCF grant funding. It is a community- led project with no commercial backing or supporters and covers 522 properties including 16 businesses, which it says will all be passed by the project – that is, a connection point will be placed outside the property boundary. This includes homes, businesses and static caravan sites, as well as community buildings such as the village hall. An invitation to tender has been launched and a bidder should be selected and the project started around April 2014, with work completed by the end of 2014.

8.5 First RCBF funded cabinet goes live in Rothbury

On 9 December 2013 both DCMS and BT announced that Rothbury, the first community to receive RCBF funds, had seen its first cabinet go live meaning over 370 homes and businesses in parts of the remote Northumberland town could place orders for fibre-based broadband. Superfast broadband services were also due to be available to 167 premises in the nearby village of Thropton as its first cabinet on Village Farm went live the following week. Over £400,000 was secured from the RCBF to rollout superfast broadband across Rothbury with further funding from BT which was chosen to build and deliver the infrastructure and network which is expected to reach 98 per cent of premises in Rothbury and the surrounding area by the end of March 2015. BT said in December 2013 that deployment was three months ahead of schedule. The

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

rollout comprises around 22km of fibre-optic cable, six new street cabinets and a mixture of FTTC and FTTP technologies. From May 2013 the delivery of this project as well as the larger county BDUK-funded project became the responsibility of Arch, Northumberland County Council’s private sector arm’s-length development company under the banner of iNorthumberland.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

9. Urban broadband voucher scheme rolls out

Following trials of the Connection Voucher Scheme in four cities during August and September 2013 under the Government’s Super-Connected Cities programme, 22 cities are participating in the scheme, as set out in Table 6, opening for applications between December 2013 and March 2014. All 22 will be in operation by spring 2014 and will remain open until March 2015. Belfast, Cardiff, Edinburgh and Manchester were the test cities. DCMS has allocated each city a set amount of funding for use during this period which will allow for a limited voucher deployment in areas identified as SME priority zones. Connection vouchers vary in value between £250 and £3,000, and DCMS predicts that up to £90million of vouchers will be issued over the total lifetime of the scheme. Vouchers can be used towards the cost of making the physical connection to a business premises. They cannot pay for monthly rental or for any IT equipment used in your business. DCMS has set up a website dedicated to the scheme on which businesses can register interest and source potential suppliers.

9.1 Ten cities offering voucher scheme

As of 7 December 2013 DCMS stated that the scheme was available in 10 cities across the UK – Belfast, Salford, Portsmouth, Cardiff, Derby, Bristol, Edinburgh, Newport, London and Manchester – and that will be extended to 12 other cities in early 2014.

Funding for the scheme comes from the £150 million Super-Connected Cities programme and the first 10 cities will share a £100 million pot of money to connect them to better quality, high-speed broadband.

Table 6: Cities taking part in Connection Voucher Scheme Aberdeen Coventry Newport Belfast Derby Oxford Birmingham Derry/Londonderry Perth Bradford Edinburgh Portsmouth Brighton and Hove Leeds Salford Bristol London (six boroughs with the York remainder joining in early 2014) Cambridge Manchester Cardiff Newcastle

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

10. Devolved nation initiatives update

10.1 Digital Scotland and CBS progress

On 16 January 2014 BT announced another 37 areas across Scotland from Aberdeenshire to Dumfries and Galloway and from Perth and Kinross to Argyll will be able to access up to 80Mbps by summer 2014. More than 39,000 homes and businesses in 13 local authority areas across Scotland will be next to get fibre-based broadband as part of the £410 million Digital Scotland partnership. The Digital Scotland Superfast Broadband initiative consists of two projects – one covering the Highlands and Islands area and the other covering the Rest of Scotland. The first locations in the Highlands and Islands, in Inverness-shire and Moray, were announced in October 2013. January’s announcement includes the first locations to be named for upgrade as part of the Rest of Scotland project and further locations in the Highlands and Islands. On 9 July 2013 the Scottish Government signed a contract with BT for a £264 million investment in broadband improvements. Together with a £146 million partnership announced in March 2013 to bring faster broadband to the Highlands and Islands and commercial investment plans by the private sector, the new project aims to ensure that 85 per cent of Scottish properties have access to fibre broadband by the end of 2015 and around 95 per cent by the end of 2017. Scotland also has the £5 million Community Broadband Scotland (CBS) initiative launched in early August 2012 with the aim of getting better broadband service into those areas that will not be covered by the larger Scottish-BT partnership by 2015. This has a number of projects under its wing as listed in Table 7. Aimed at communities which are currently receiving speeds of less than 2Mbps, CBS is working with each community project on an individual basis and there is no set limit on the speeds that can be achieved. Highlands and Islands Enterprise is the lead delivery partner of the programme which operates across Scotland. CBS has a start-up fund, and is assisting six community pioneer projects. It also has a network on the ground of CBS advisers and a telephone helpline. Table 7: Community Broadband Scotland six pioneer projects Project Description Ewes Valley (Dumfries and Galloway) A small rural community at a very early stage in its broadband development plans. Not currently able to receive a standard broadband service due to distance from the serving BT exchange Tomintoul and Glenlivet (Moray) Remote, inland mountain communities located within the Moray area of the Cairngorm National Park. Includes the highest village (Tomintoul) in the Highlands. Area remote from many services Elvanfoot (South Lanarkshire) A community at an advanced stage in their broadband plans (Elvanfoot) and with scope to provide a service to a neighbouring community. Community has combined with nine other area villages and formed B4GAL - broadband for Glencaple and Lowther.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

Potential access to funding from area renewable energy projects Colonsay (Argyll and Bute) An island with a low population. Active local group has identified improved broadband provision as a key component for supporting development and retaining population Corgarff and Glenbuchat (Aberdeenshire) Small dispersed settlements within glens at the edge of the Cairngorms. Area remote from serving BT exchanges with many residents having to rely on a satellite broadband provision Applecross (Highland) A remote coastal community with a low population and heavily dependent on tourism. No users are currently able to receive a standard broadband service in excess of 0.5Mbps. No standard broadband service possible along the north coast

Those hoping to win project tenders under the CBS include the Almond Project which had planned a fibre deployment close to Edinburgh but which has since reverted to rural broadband opportunities.

10.2 Northern Ireland proposes intervention areas

BT has already fulfilled the Next Generation Broadband Project contract that it was awarded by the Northern Ireland Executive to provide FTTC services to across the region. The final milestone of the Next Generation Broadband Project was completed on 30 April 2011 when the target of at least 85 per cent of businesses in Northern Ireland had access to broadband services of at least 2Mbps in rural areas and 10Mbps in urban areas. The fibre-based network now passes over 90 per cent of homes, and over 50 per cent of BT’s retail broadband customers take fibre-based services. Back in August 2011 further funding of £4.4 million from the UK Government was announced to be matched by the Northern Ireland Executive. The DETI Telecoms Action Plan 2011-15 proposed that it would ‘ensure the continuing provision of access to a broadband service in Northern Ireland, regardless of where you live or do business. The Government has proposed that virtually all premises across Northern Ireland should be able to access a broadband service with a speed of at least 2Mbps by 2015 and to provide superfast broadband to at least 90 per cent of premises with speeds in excess of 24Mbps. A total public sector subsidy of £19.3 million is currently available including the £4.4 million BDUK funding. Following an initial consultation, a second consultation was prepared which further refined the identified need, the potential intervention areas for 2Mbps and 24Mbps services, the regulatory background and how the proposed intervention would be delivered. The proposed intervention area for basic and superfast broadband has since been published.

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Point Topic – UK Plus report – 2014: crunch year for Superfast UK

10.3 Superfast Cymru sees over 100,000 premises gain high-speed access

BT was awarded the contract for delivery of the Next Generation Broadband for Wales (NGBW). Fourteen areas across the country will benefit from superfast broadband, which is being rolled out in 2013 and 2014. The Superfast Cymru programme will then be extended to all of Wales in 2014 and 2015 with the aim of making the network available to 96 per cent of Welsh premises by spring 2016. Under the £425 million initiative announced on 24 July 2012, public funding of £205 million including £56.9 million from BDUK and £89.5 million from the ERDF is being provided.

Superfast Cymru will involve the laying of around 17,500km of optical fibre cable and the installation of some 3,000 new fibre broadband cabinets. At the beginning of 2014 over 100,000 homes and businesses in Wales had access to high-speed fibre broadband as part of the Superfast Cymru programme. The milestone was reached as the village of Cemaes Bay, Anglesey, was switched on to the technology, one of five new communities to go live on the Isle of Anglesey. Engineers have now installed over 300 new fibre broadband cabinets and more than 340 kilometres of fibre cable. In September 2013 the Welsh Government announced that its £4 million Broadband Support Scheme providing grants of up to £1,000 to those living in rural parts of Wales where broadband connectivity is below 2Mbps is to be replaced by an almost identical alternative. The new Access Broadband Cymru scheme went live on 1 October 2013, also providing grants of up to £1,000 per premises with slow broadband connections, but will only be available to use in areas where the Superfast Cyrmru programme will not cover.

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