Rural Oxfordshire enters high-speed digital age

In the sleepy Oxfordshire villages of Sunningwell and Bayworth, the rumble of chain diggers and the clang of shovels are the sounds of work under way to bring them into the high-speed digital age.

However, this is not through the efforts of the country's largest broadband providers, BT and Virgin Media, or under the auspices of the £1.2bn fund set up specifically to provide superfast internet to such rural areas.

Instead, close to a third of the 250 homes will be connected to internet speeds of up to 1 gigabit per second by a company called Gigaclear, which is building a business finding the holes in BT's fibre coverage and providing its own much faster services.

These homes, which signed up in advance to bring the network builder to their village, will be linked to internet speeds more than 50 times the national average.

"We started marketing for customers in February," says Gigaclear chief executive Matthew Hare. "By mid-March we hit the target we needed of 92 of the 249 properties."

Gigaclear has built and operates 23 rural fibre networks, and has a further 31 under construction.

Mr Hare says there are up to 1.5m homes across England not covered by existing BT and Virgin Media plans to provide superfast broadband. "We don't target where the big companies are already. And the way the [state broadband programme] was designed, it has focused on the densest areas in rural parts."

Investors are following the developments closely, with Gigaclear more than doubling the size of its business this week by raising £30m from funds run by Prudential and Neil Woodford.

Other alternative network providers are also flourishing. Hyperoptic is backed by funds of George Soros and builds high-speed broadband connections of up to 1gbps to residential developments in cities. Hyperoptic wants to connect more than 500,000 homes within the next five years.

CityFibre raised £30m last year to provide high-speed fibre to more than 1m homes and businesses by 2016, mainly in about 20 smaller cities.

These companies are betting that the UK will need better digital infrastructure as consumer demand keeps rising for internet services such as TV and gaming that require greater bandwidth. Businesses, meanwhile, need reliable internet for communications and for processing and storing information in the cloud.

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Dana Tobak, managing director of Hyperoptic, said: "More people are taking one gig lines than we expected."

The Federation of Small Businesses polled its members this week about the incoming Conservative government. The business advocacy group found that access to broadband was in the top five priorities.

"Reliable broadband and mobile connectivity have become modern business necessities, yet far too many rural businesses feel they are missing out," says Mike Cherry, policy director at the FSB.

"It is positive to see alternative providers stepping up to meet this need in rural areas," he added.

Work is also under way at the bigger network providers to improve coverage. BT, the former national telecoms monopoly, provides fibre to more than 20m premises, and has plans to roll out services of up to 500 megabits per second to "most" British homes in the next 10 years.

Virgin Media has promised to invest £3bn in the next five years to take its cable network to more than 16m homes.

However, gaps remain in both networks. With Sajid Javid named as the new business secretary, the task of connecting the last areas of Britain not covered by the rural broadband programme will weigh on his successor, John Whittingdale.

These areas - the last 5 per cent of the country - are also the hardest to reach, making it commercially unviable for mainstream providers.

BT has already signalled it will lobby for further state funds to help fill the gaps, which are not just in remote parts of the country. The City of London and the east London area around Tech City, for example, are among the most prominent areas where traditional broadband providers have struggled.

In the meantime, the smaller network builders are looking to provide their own niche services, with or without state help.

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