UK aiming for £1bn investment in full-fibre to homes and businesses

The UK Government has launched a £400m fund designed to spur more than £1bn of investment in the roll-out of ‘full-fibre’ broadband.

Britain’s homes are mostly connected to the Internet via underground copper wires to a cabinet on the street. Full-fibre networks run fibre connections to the doors of customers’ homes or businesses, via laser light through glass or plastic tubes. Unlike broadband run through copper wires, which can degrade depending on distance or the number of people accessing the Internet, full-fibre networks are much more resilient.

Traditionally, full-fibre has been difficult to finance because the industry is relatively young and a lack of certainty around future demand makes investment hard to secure. This has held back alternative providers from entering the market and consumers have been left with limited choice, which in turn, has restricted their ability to benefit from the technology.

The fund, which is expected unlock more than £1bn of capital in the sector, will be managed and invested on a commercial basis by private sector partners, generating a commercial return for the Government. It is hoped this will ignite interest from private finance to invest in the sector, resulting in more alternative providers entering and expanding in the market.

“We are investing £400 million to make sure the UK’s digital infrastructure is match-fit for the future. As technologies change and people’s habits move with them, it is crucial we play our part to ensure Britain stays at the front of the pack,” said Andrew Jones, Exchequer Secretary to the Treasury. “Gone will be the days where parents working from home see their emails grind to a halt while a family member is gaming or streaming Game of Thrones in the next room. Full fibre will provide us with the better broadband we need to ensure we can work flexibly and productively, without connections failing.”

Jones launched the fund in Peterborough, which has a 120km full fibre network created by the independent network builder and operator CityFibre. Installation followed a successful demand aggregation campaign, which saw 25% of the city’s businesses register an interest and enabled the network to be extended to all six of Peterborough’s business parks. Currently 300 sites in Peterborough, including schools and hospitals, have been connected to the network and 4,000 businesses also have access.

With the Peterborough core network established, supported by the local authority and demand aggregation, the city is now a prime candidate for extension of to residential areas, which the Digital Infrastructure Investment Fund could help finance. Two infrastructure investment firms will manage the fund; Amber Fund Management and M&G Investments.