Government superfast broadband plans will suffer ‘minimal impact’ from Carillion collapse

Written by Sam Trendall on 15 January 2018 in News

Partners of fallen firm pledge that work to roll out networks across the UK will continue as scheduled

Credit: PA

The liquidation of Carillion will have minimal impact on the rollout of superfast broadband across the UK, according to the government and the collapsed company’s technology partners.

The embattled construction firm owns a 60% stake in a joint venture (JV) with telecoms and network services company telent, dubbed Carillion telent (Ct). The JV – which is a separate legal entity to the liquidated Carillion business – is involved in various projects across the UK to roll out broadband connections.

According to telent, the joint venture was established “with a legal structure that gives telent the right to step into 100% of the joint venture in the event of insolvency, enabling the JV to continue to operate, providing continuity and business as normal” for clients, employees, and firms to which it subcontracts work. 

“Existing contracts will be honoured and continue to run as normal, including the two biggest contracts with Openreach and Gigaclear,” added telent.

The contracts of all staff not already employed by telent will transfer to the telecoms services firm, and it will continue to work with all subcontractors under existing agreed terms, the company said.

Mark Plato, chief executive of telent, added: “Given our technical know-how, proven experience and financial strength, we will continue to successfully operate the Ct JV activity. We have initiated implementation of our contingency plans this morning to ensure a smooth transition and are maintaining open communications with customers, workers, and subcontractors.”

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The most significant contract held by Carillion telent is its work with Openreach, for which it provides services extending and maintaining its voice and data network across much of England and Wales. Less than a year ago, Carillion telent signed a contract extension with the BT-owned company that was worth up to £1.5bn over a potential five-year term.

An Openreach spokesperson said: “[Carillion telent] is one of seven major partners providing similar services to Openreach across Britain, and we have robust processes in place to monitor and manage all of our supplier risk. We have conducted a thorough legal and financial assessment of the JV, and we’re confident in its ongoing viability without Openreach incurring any extra cost or liability. We’ll continue to work closely with telent to avoid disruption, but we have every confidence that there will be no impact on our national network services and plans.”

In October 2017, Carillion also signed a £200m contract with rural broadband specialist Gigaclear to deploy fibre internet connections to 80,000 properties across Devon and Somerset. 

Matthew Hare, chief executive of Gigaclear, said: “It is very sad news that Carillion has gone into compulsory liquidation. Whilst this may have a minor impact on delivery schedules, Carillion telent is a separate business holding its own funds and bank accounts. Therefore, the contract with Gigaclear to deliver the build for full-fibre broadband to the south west region still stands. We are committed to delivering ultrafast broadband to Devon and Somerset, and already work with alternative partners in the area should the need to relook at capacity and resource arise.”

The work being carried out by Gigaclear in the south west is backed by Connecting Devon and Somerset, a partnership bringing together representation from all the local authorities in the area, as well as a range of technology firms, and the Department of Digital, Culture, Media and Sport – in the form of its Broadband Delivery UK (BDUK) funding programme.

A DCMS spokesperson said: "We have been advised by contractors that any impact on the BDUK rollout of superfast broadband is likely to be minimal."

In recent months, the government has stressed its commitment to ensuring that broadband in the UK has a “full-fibre future”, and has unveiled various strategic and funding initiatives. It is currently considering two options for making sure every property in the UK has access to superfast broadband by 2020: a universal service obligation that, effectively, enshrines access to a superfast connection a legal right for all citizens; and a proposal from BT to install the technology across the country at its own expense.

About the author

Sam Trendall is editor of PublicTechnology

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