Original article ISPreview UK:Read More
At the end of last month CityFibre announced that they’d reached an agreement with the Government to significantly cut the roll-out scope of their Project Gigabit broadband contracts. At the time this was expressed as being because commercial builds by rivals would reach further than originally expected. But this overlooked the hidden gap of premises that have been left with no alternative plans.
Just to recap. CityFibre previously held ten Project Gigabit contracts – originally representing over £920m of government funding for a subsidised build to 557,000 premises in “hard-to-reach” rural areas (1.36 million if we included their supporting commercial build). But in May 2026 these were “re-scoped in response to the accelerated rollout of commercially funded full fibre” (here).
In practice, the agreement saw the operator abandon their £58.6m Project Gigabit contract for Nottinghamshire and West Lincolnshire (Lot 10) and significantly reduce the roll-out for most of the nine other contracts that remained. CityFibre now expects to connect a total of 450,000 rural and harder-to-reach premises by 2030, including 226,000 subsidised through Project Gigabit (c.70k of that 226k has already been completed).
On the surface this sounded like gigabit broadband coverage would not be negatively impacted because those areas descoped by CityFibre would still be reached commercially, except we soon learnt that wasn’t the case.
Explaining the real change
The first thing to understand here is that Project Gigabit contracts do change a bit over time due to various different reasons – informed by regular ‘Open Market Reviews’ of existing UK deployment plans. For example, commercial operators may expand or reduce their roll-out plans in the same region, which can reduce or grow the scope for public investment within those same contracted areas.
The contracted operator could also find the deployment to be more expensive, or possibly even cheaper, than previously envisaged. Such adjustments may occur due to changes in build costs and interest rates / inflation, as well as any unexpected obstacles to street works or greater efficiencies of build than planned or expected.
Suffice to say, there’s often a bit of a yo-yo movement as contracts progress (they may expand or even shrink over time), although in this case CityFibre has significantly reduced their plans. The catch is that commercial builds usually have a much more modest impact upon Project Gigabit contracts, which tend to be focused on rural areas where rivals often struggle to build FTTP at pace or scale.
On top of that, ISPreview soon began receiving quite a bit of feedback from those impacted by the change, which strongly indicated that some communities previously covered by these contracts were being left with no future plans for gigabit broadband coverage – either commercially or via subsidised builds. When challenged on this, CityFibre informed us that the “majority” of impacted premises originally due to be upgraded by CityFibre through Project Gigabit will now be connected commercially.
A spokesperson for CityFibre told ISPreview:
“The majority of premises due to be upgraded by CityFibre through Project Gigabit will now be connected commercially, meaning no public funding is required. Given the extent of commercial build in these areas, and the options for alternative delivery to the remaining premises, these changes will not affect BDUK’s ability to achieve the UK government’s target of 99% UK gigabit coverage by 2032. The plan for the premises that CityFibre are no longer building on is a question for BDUK.”
The question that’s harder to answer here is how do they define “majority“, since 51% can be just as much a “majority” as 99% – the gap left with no build by either Project Gigabit or commercial coverage could thus either be a few tens, hundreds or thousands of premises. We simply don’t know, so we asked the Government’s Building Digital UK (BDUK) agency, and they couldn’t give us a completely clear answer either (we assume the final third of premises being referenced below includes those still under contract and those being left in limbo).
A Government (BDUK/DSIT) spokesperson said:
“As commercial gigabit broadband rollout has accelerated across the UK, we’ve agreed changes to CityFibre’s Project Gigabit contracts to ensure we are getting the best deal for taxpayers.
Two thirds of premises that were due to be upgraded by CityFibre through Project Gigabit either already have access to a gigabit capable connection, or will now be connected commercially – meaning public funding is no longer required.
We are already engaging with other suppliers so that the remaining premises are upgraded at pace and communities get the connectivity they deserve. These changes will not affect our ability to hit our target of 99% UK gigabit coverage by 2032.”
In fairness, BDUK do regularly publish detailed datasets setting out which premises are in commercial rollout plans, and which are in Project Gigabit contracts. But we don’t have the resources to be able to process such complex data in order to accurately identify the gap left in limbo by CityFibre for each contract, which in any case is an answer that BDUK should already have and yet the government chose not to share it when asked.
However, the Arundel and South Downs MP, Andrew Griffith, recently asked a similar question about the specific situation in West Sussex. As we noted in our original article, CityFibre’s £100m Project Gigabit contract for East and West Sussex had originally aimed to reach c.52,000 hard-to-reach premises, but after the change they would now only tackle around 13,000 premises for £25.2m.
According to the government’s response to Mr Griffith, of the 6,490 premises in Arundel and South Downs that were included in the original scope of Project Gigabit to be delivered by CityFibre, some 5,890 have now been “de-scoped” from the contract. Out of those, 850 now have access to gigabit broadband, while just 890 are included in future commercial delivery plans, which is said to leave 4,150 premises without either a commercial or subsided build plan.
The above reflects just one area inside one of the contracts, but it’s not unreasonable to expect that the gap now likely to be left in limbo by CityFibre’s change across all contracts may be bigger than they’d like to admit. The good news, if you can call it that, is we have seen similar situations before where contracts have been abandoned or scaled-back, but where alternative solutions were later found.
The most common fix is for such premises to be swapped into one of Openreach’s larger Type C (Cross-Regional) contracts under Project Gigabit (no other suppliers tackle Type C), which is precisely what that framework exists to help tackle (examples here, here, here and here).
According to our sources, a good portion of the premises that have been left in gigabit broadband limbo by CityFibre’s retreat should hopefully soon end up being moved into a Type C contract, assuming there’s no significant interest from other suppliers.
However, the situation will inevitably cause additional delays to delivery, since any new supplier will naturally need to conduct its own work to figure out which premises they can and cannot tackle, as well to plan the necessary resources and to conduct engineering surveys. History suggests that this can add an extra year or so to the roll-out plan for an area vs the original plan.