Gigaclear: Boldly going where no company has gone before
PUBLISHED: 10:21 20 April 2016 | UPDATED: 10:21 20 April 2016
As more of our lives go online, rural communities have increasingly felt marginalised with slow, or no broadband. Gigaclear is flying to the rescue
Matthew Hare. A 21st century Captain Kirk, boldly going where no man has gone before.
His particular Starship Enterprise is Gigaclear, the company he started from scratch in 2010 which is now rolling out fibre broadband to thousands of people living in rural communities across the UK. BT failed to do this, and has been widely criticised for its failure. But Matthew isn’t throwing brickbats, he’s more interested in how his Abingdon-based business can get on and fill that gap.
Gigaclear’s business model is to provide fast and reliable broadband exclusively to homes and businesses in rural communities, using ‘fibre-to-the-premises’ (FTTP) networks. I won’t bore you with the technical details, I don’t want to know how a washing machine works; I just want it to wash clothes. Similarly, few are interested in what infrastructure is needed to allow them to upload, download or watch something on iPlayer without the picture freezing or buffering. They just want it to work consistently and efficiently in their rural abodes.
Gigaclear is building a new network in rural areas, a fit-for-purpose fibre broadband infrastructure that will last for 40-50 years. It’s a bit like installing a new railway line, or electricity to previously off-grid communities.
So far the company has installed fibre outside 18,500 rural properties in rural Gloucestershire, Oxfordshire, Essex, Northamptonshire, Leicestershire, Rutland, Lincolnshire, Cambridgeshire, Kent and Berkshire. It was the first operator other than BT to secure contracts as part of the government-subsidised BDUK programme to bring broadband of at least 24Mbps to 95% of the UK. Gigaclear is building networks using both commercial investment, and under BDUK contracts in Gloucestershire (part of the county’s Fastershire initiative), Berkshire and Essex.
This year it plans to lay fibre broadband network to at least 40,000 additional properties, a major investment by the company, one third of which is being financed through an £18 million debt facility from the European Investment Bank (EIB). The loan, the largest of its kind awarded to a UK company, will support Gigaclear’s fibre broadband expansion during 2016.
According to government statistics, 9.2 million of the UK’s population live in rural areas, and with more government support and other services going on-line, access to the internet is becoming less luxury, more necessity. This is especially true in rural areas where the social infrastructure can be thin. With fewer country bus services, mobile lending libraries or even community nurses, access to good quality internet services can provide an important interactive lifeline for those who live in the countryside through choice, or because of work.
Matthew started Gigaclear in 2010 after selling his business running managed networks for small corporate companies. “We ran network infrastructure for a variety of companies, for voice, data and remote workers. It was a great business,” he says.
Having sold up at 48, and obviously not ready to retire, Matthew looked around for something else to occupy his time, and decided to do what none of the big telecoms companies wanted to do: build a robust new rural network across Britain.
“A business built on solving easy problems is easy to copy,” he says. “If you can solve a difficult problem, you have a very attractive business.”
In 2011 he bought Rutland Telecom and built his first fibre network in Hambleton, a village in the middle of Rutland Water. Gigaclear was born out of this first success.
“We are trying to democratise fibre, making it available to anyone who wants it at a reasonable price,” he says. That’s not to say it’s cheap. It costs around £1,000 per household to lay fibre broadband in rural areas, a figure not likely to appeal to your average rural home-owner when they can get broadband, albeit slower than a slug swimming in treacle, for substantially less a month. Gigaclear is underwriting the cost of laying the fibre infrastructure and offering an entry-level monthly fee for super fast, reliable fibre broadband of £39.95.
To make the business model stack up, Gigaclear needed long-term investors, and Matthew went out to find them.
“If we have solved a very difficult problem, and I believe we have, of getting great broadband into rural Britain sustainably and cost effectively, that creates value for the business,” he said.
102 private individuals invested through the government’s Enterprise Investment Scheme and two years ago Gigaclear secured its first institutional investor, Woodford Investment Management, then last year the Prudential climbed aboard. These two big investors now own over two thirds of the business which they see as a long-term investment. “They understand that customers using this network will use the system like they do water or any other utility: over decades,” says Matthew. “They can afford to have a longer term view of their anticipated returns.”
Matthew is the only CEO I’ve interviewed who smiles as he says the company will make big losses this year, and expects to do the same next year. “We take capital from our investors and put it in the ground. We know and they know it will take 10 years or so to get that money back.” But both parties understand that once people get accustomed to fast broadband, they’re as likely to want to give it up as they would be willing to turn off their electricity at the mains.
Gigaclear already offers up to 1000 Megabits per second up and down, so it’s as quick to upload photos and files as it is to download them. Last November it announced trials of 5000 Megabits per second service to customers.
“In five years our network will all be lit at 10 Gigabits per second and in 10 years it could be 100,” says Matthew. “Each customer can choose and pay for how much speed they want.
“Our aim is to do one thing fantastically well and that’s offer Internet access over fibre. We aim to give reliable, consistent, high performance.”
What seems to me to make Gigaclear different from the much bigger companies operating in the same space is that for this company, it’s personal. Visiting the company’s Abingdon headquarters, I’m shown how much attention the engineers put into finding the right location for their cabinets. Using Google Earth they guide me around a Cotswold village they’re working on. “This is such a pretty village, we can’t put the cabinet just anywhere,” says the engineer. “The parish council wouldn’t like it.” Wouldn’t like it? For heaven’s sake, does a parish council have a say in where manhole covers go, or bossy road signs telling motorists to slow down for horses? Surely no one’s going to complain about an unobtrusive cabinet housing lots of expensive fibre cabling to enhance their quality of life? Apparently they do.
“We work with the communities we are in and parish councils can have a massive impact on how we roll out the service,” says Matthew. “They advise us on where we can locate our equipment, who owns it and what land might be developed in the future so we can put in extra capacity to support that.
“This is a construction project. Often we are the first people to dig the roads for 20 years, since the electricity companies buried cables. Sometimes the land hasn’t been touched since the 1980s.”
I’m shown how well the system is automated, and even better news - help desk staff are located in Abingdon, not offshore. “It’s in our interest to be able to monitor individual customer’s connections efficiently so that we can solve problems quicker,” says Matthew.
The average take-up across all of the networks installed by Gigaclear is around 36%. That sounds low, and it varies widely. But Matthew appears pretty chilled. “The proportion of people taking the service rises over time.” Of course it will, if my neighbour is downloading the latest blockbuster in 30 seconds, while my broadband is taking eight hours to do the same thing, I’ll look at Gigaclear when my current provider contract runs out.
“Our sales and marketing is hyper local,” explains Matthew. “Before we begin work in a village, we’ll drop leaflets off and run advice sessions at the village hall or pub. Then we’ll come to the village fete or other event when the network is up and running.
“The bigger we get as a business the more profile we have and the more confidence people will have in us.”
Matthew predicts business growth of 300%-400% each year. That’s certainly going some. But there are lots of challenges. “It’s our job to solve as much of the rural broadband problem as we can. We can certainly serve hundreds of thousands of properties. It could be millions.
So what’s next?
“What we are doing changes people’s behaviour and some interesting opportunities will come out of the fact that when you have very high capacity, fast reliable broadband in your home and business, it will change the way you behave and open up new areas for new businesses.”
Beam me up Scotty. It’ll only take a second on Gigaclear’s fibreoptic broadband.