Press release

BDUK/DCMS Funding Secured Now Totals Over £15m, Targeting 100,000 Premises

Exclusive contract to deliver faster broadband speeds to 1,500 premises across North Lincolnshire

Bigblu Broadband plc (AIM: BBB.L), a leading provider of alternative super-fast broadband services, announces that its subsidiary Quickline Communications Limited ("Quickline") has won a further competitive tender to provide significantly improved broadband speeds to premises across North Lincolnshire that are unable to access fast and reliable internet connectivity.

On behalf of the North Lincolnshire Local Authority , Quickline will extend its network using both fixed wireless and full fibre technologies to a further 1,500 premises in rural areas to connect to superfast*, ultrafast** and in some cases gigabit speed broadband services. The contract provides for a total network investment of £1.8m, leading to significantly faster broadband speeds in the more isolated areas of North Lincolnshire within two years.

The programme will receive a subsidy of up to £1.4m, with £1.0m from the European Agricultural Fund for Rural Development (EAFRD) and £0.4m of funding from the North Lincolnshire Local Authority. Quickline is committing £0.4m of network investment to support the roll-out.

Given the limited connectivity currently available in the contracted areas, Quickline expects to see strong take-up of broadband services, further increasing its addressable market and customer base. Quickline also expects to deliver at least its targeted return on capital of c.15% over the life of the contract.

Quickline is focussed on delivering improved broadband connectivity in the rural areas of Northern England, where a significant digital divide remains and hundreds of thousands of premises are in need of increased broadband speeds. Quickline's heritage is fixed wireless but its network includes increasing amounts of fibre connectivity.  Its aim is to be the leading UK dedicated rural broadband infrastructure provider, delivering innovative, flexible and hybrid solutions that can address the millions of premises unlikely to be served commercially by full fibre networks for many years to come.

Three BDUK contacts secured, 5G DCMS Grant, Rural Gigabit Vouchers to target 100,000 premises 

This is the third tender won by Quickline in quick succession under the BDUK Superfast Programme and follows a long period of engagement with both local authorities and BDUK regarding how best to improve connectivity in deep rural communities. Today's announcement follows a £9.1m contract, £7.6m subsidy, awarded by the Combined Authority of West Yorkshire and a contract for up to £8.1m of network investment with up to £6.1m of subsidy in Lincolnshire. In addition, Quickline was selected by the DCMS  in February to lead a £6m 5G project to boost rural connectivity in North Yorkshire.

The three contracts represent an opportunity to provide significantly improved network connectivity to over 16,000 premises within Quickline's current footprint using both fixed wireless and full fibre technologies. Quickline will make a combined network investment of up to £19m to pass these premises with up to £15.1m funded via subsidies and £4.1m from Quickline's own resources. Quickline will also invest further capital in scaling up the organisation, sales and marketing and connecting customers.

The subsidies received are deferred as capital grants and recognised as other income over a four year period. This will boost Quickline's reported revenue and EBITDA as its customers, revenues and profits develop.

Finally, Quickline is already an approved supplier of Rural Gigabit Voucher which provides for up to £1,500 per residential premise and £3,500 per business premise for new gigabit-capable connections in rural areas and is quickly ramping up infrastructure build via this programme. Through a combination of its current footprint, the three tenders and Rural Gigabit Vouchers, Quickline sees scope to target 100,000 premises.

Significant Government Support Ongoing

BDUK's £1.7bn Superfast Broadband Programme is being phased out although new contracts can be signed before the end of December 2020 and supported through to 2026. Going forward, BDUK is adopting an "Outside-In" approach funded by the Chancellor's £5bn commitment to fund gigabit capable deployment in the hardest to reach 20% of the UK.

The "Outside-In" approach has two main elements: a Rural Gigabit Voucher Scheme and a Dymamic Purchasing System. Quickline is already an approved supplier and beneficiary of the voucher Scheme which provides up to £1,500 per residential premise and £3,500 per business premise for new gigabit-capable connections in rural areas. Quickline will continue to build new network where these vouchers are available.

The Dynamic Purchasing System (DPS) is expected to be introduced in April 2021 and allows infrastructure providers to bid for funding to roll-out gigabit-capable networks to underserved regions. Quickline is part of the industry consultation into this scheme which has yet to be finalised. However, it is understood that the hardest to reach areas will be divided into lots with an average size of around 3,000 premises and an average subsidy of around £1,000 per premise passed. Quickline is already registered on the scheme and will consider lots as they become available.

Finally, we recognise the importance of gigabit capable networks and the role that full fibre plays in delivering them. However it is worth noting that in many rural areas of the UK, full fibre will remain too expensive and challenging to deploy even with government support. Quickline's  5G DCMS backed project in North Yorkshire is helping increase understanding as to how 5G enabled fixed wireless could provide a gigabit solution that is both much faster and lower cost to deploy.

*Superfast defined as broadband speeds in excess of 30Mbps

** Ultrafast defined as broadband speeds in excess of 100Mbps

Steve Jagger, CEO of Quickline, commented: "The variety of solutions we provide means that we are well placed to build on the recent tender wins. We continue to work closely with the Government and Local Authorities and are delighted to be able to further grow our reach through this latest win. We believe that there is significant scope for us to help close the digital divide and we look forward to supporting further initiatives in due course."

Andrew Walwyn, Chief Executive Officer of Bigblu Broadband, commented: "We are delighted by the continued progress at Quickline as it takes advantage of the significant growth opportunity. Its strong technology portfolio means that it is extremely well placed to support the Government's ambition of nationwide gigabit coverage by 2025. With the combination of Government tenders, M&A and organic investment underpinning its strategy we remain excited by the expected pace of growth."