CityFibre Contracts for Project Gigabit Rescoped Due to Increased Commercial Rollouts

Key Takeaways

• CityFibre now targets 226,000 subsidised premises by 2030
• Contract value cut from £779.7 m to £500.7 m
• 150,000 hard‑to‑reach sites already built, 80k commercial
• Nine contract regions span East, South and Midlands England
• Connexin‑derived contract likely to shift to Openreach

Pulse Analysis

Project Gigabit, the UK government’s flagship programme to achieve near‑universal gigabit broadband, has entered a new phase as CityFibre’s contracts are being recalibrated. The latest adjustments reflect a surge in commercial rollouts by rivals such as Openreach, which have taken over many addresses originally earmarked for public subsidy. By trimming the subsidised footprint to 226,000 premises, the Department for Business and Trade (BDUK) aims to focus public funds on the most challenging locations, while allowing market forces to fund the bulk of the upgrade. This shift underscores a broader policy trend toward leveraging private capital to accelerate fibre deployment, reducing the taxpayer burden.

For CityFibre, the rescoped contracts present both a challenge and an opportunity. The firm has already delivered full‑fibre to 150,000 rural and hard‑to‑reach sites, blending 80,000 commercial installations with 70,000 subsidised ones. However, the reduction in overall contract value—from £779.7 million to £500.7 million—means the average subsidy per premise has risen, reflecting higher labour, material costs and the technical difficulty of reaching the remaining sites. The company’s strategic focus will now centre on the nine designated regions, ranging from Cambridgeshire to Kent, where it can leverage existing infrastructure to meet the 450,000‑premise target by 2030.

The broader market implications are significant. As commercial providers continue to outpace public‑funded projects, the Open Market Review process will face heightened scrutiny to ensure accurate forecasting and avoid duplication. Policymakers must balance the need for rapid broadband expansion with fiscal responsibility, while operators like CityFibre and Openreach compete to capture the remaining high‑cost, low‑density pockets. Successful execution will not only boost the UK’s digital competitiveness but also set a precedent for how public‑private partnerships can deliver critical infrastructure in the coming decade.