Abingdon-based UK broadband ISP Gigaclear, which has long been rolling out their gigabit speed Fibre-to-the-Premises (FTTP) network to cover rural locations across Essex (England) – via a mix of commercial build and state aid supported contracts, is now facing legal action from Essex County Council (ECC) over an alleged failure to deliver on their contracted builds.
The alternative network provider is principally owned by Infracapital, together with Equitix and Railpen. The company previously had investment commitments estimated to be worth up to around £1.1bn (here), but at the end of last year they also secured a new £1.5bn debt facility (here) and have since won the £16.6m Project Gigabit rollout contract for East Gloucestershire (here), as well as the contracts for North and South Oxfordshire (here).
However, the situation in Essex concerns their earlier contracts under the previous Government’s original Superfast Broadband (SFBB) programme, which was managed at a local level by the council with support from the Building Digital UK (BDUK) agency. As we very roughly recall, Gigaclear held several of these contracts, such as Phase 2b (part of Epping Forest), Phase 3.1 (Uttlesford), Phase 3.2 (Braintree, Colchester) and Phase 4a.1 (Epping Forest).
As we’ve reported in the past, Gigaclear did face some significant delivery delays to a number of their rural broadband roll-out contracts a few years ago, which wasn’t just a problem in Essex but also affected similar contracts in other counties too (e.g. Devon and Somerset – here, where the contracts were eventually scrapped as a result). But some local authorities, like Essex, opted to stick with the provider and accept some delay.
According to the BBC News, the ECC has launched court proceedings against the firm for breach of contract, claiming three of their four build contracts remain unfulfilled – these were expected to bring their gigabit broadband network to more than 10,000 remote rural premises. But apparently around 400 of the contracted addresses in the Braintree, Colchester, Epping Forest and Uttlesford districts are still without access.
Lee Scott, ECC Cabinet Member for Planning a Growing Economy, said:
“We have made every effort to resolve these issues with Gigaclear, supporting them throughout the process. It is deeply disappointing to be let down in this manner.
Rural connectivity is crucial, and our residents have been waiting patiently for better broadband access… connectivity they need and rightfully deserve.”
Nathan Rundle, CEO of Gigaclear, said:
“We have successfully delivered ultrafast full fibre broadband to over 90,000 properties in Essex to date.
Over 12,000 have been delivered using the top-up government subsidy programme.
We are aware of the application by Essex County Council and for legal reasons it is inappropriate for us to comment at this stage.”
The figure of 400 premises might not sound like much, but in remote rural areas it can be extremely costly and time-consuming to extend FTTP to such premises (sometimes reaching £2-4k per premises). In addition, unexpected build obstacles can sometimes make it so expensive as to be economically unviable to deliver.
Network operators with contracts often try to mitigate against such issues by updating their plans to compensate via an expansion in different (more viable) areas, although how much allowance there is for change does depend upon the details of the contract. Likewise, the exact details of the situation in Essex aren’t currently known, although it’s a shame that they’re having to settle it through the courts.
The situation will probably also be raising question marks over some of Gigaclear’s more recent contract wins under Project Gigabit, which they’ll hopefully be moving heaven on earth to deliver on time. Lest past issues start to be perceived as an expected trend.