The CEO of the UK’s rural-focused fibre broadband provider discusses rollout targets, regulation and Brexit

Eurocomms.com: You said last year that you plan to reach 100,000 properties by the end of 2017. How are you progressing towards that target?

Matthew Hare: We are accelerating our build and will hit 100,000 premises passed early in 2018, so we will be a little less than that at year end.

What are the biggest challenges you facing as you look to reach this goal?

Right now, Gigaclear’s biggest challenges are twofold.  

First, the scope of the new Broadband Delivery UK projects that we have been awarded in Devon, Somerset, Herefordshire and Gloucestershire has changed.  

This has meant that we have needed to re-plan extensively. As our network is all buried and all-new construction, fixing the scope before starting is much more efficient than changing the design mid-flight.  

Second, the physical disruption caused by bringing a new buried utility to large numbers of rural properties, necessitating working in almost every road in a region, means that we have to co-ordinate very closely with all other utilities and the local Highways Authority.  

This throws up a series of challenges and different responses from different highways authorities, some more helpful than others.

You've recently signed up your 10,000th customer - how do your sign-up rates compare with the rest of the industry?

I would say that our sign-up rates are broadly in line with other similar pure fibre businesses.  

Certainly there are some, like B4RN, that have a higher sign-up rate, and I am sure that there are others that are running slightly more slowly.

In March, Ofcom proposed price caps on Openreach - what are your thoughts on this in terms of how it will affect your business?

We do not understand Ofcom’s logic thread that lower wholesale prices will lead to greater investment in new infrastructure.  

If their objective is to get more supply, how does a lower price get you there?

Basic economics tell you that if you lower prices you get more demand but less supply.

What impact, if any, is Brexit having on your overall strategy?

Brexit is having no impact on our strategy.  

However, it has brought into focus for some parts of Government how important the future competitiveness of the UK will be to our prosperity and how communications networks like Gigaclear’s underpin other creative and productive activities.

Last year, you won a further £111 million in equity funding – what timeframes are your investors working towards in terms of RoI?

You will have to ask our investors what they are working towards.  

As a business we expect to get payback over 7 years on each investment we make in new infrastructure.

Mark Collins, Co-Founder of CityFibre, told us earlier this year that it was realistic to expect the UK to aim for 80 percent coverage of FTTP by 2026. Do you agree?

Well, it does largely depend upon other operators, as this is the equivalent of 24 million properties with FTTP.  

It will be a great achievement if we can deliver that, and Gigaclear expects to do a substantial part of the rural component of that build.

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