Network Rail seeks £1bn private sector investment in telecoms infrastructure

Rail network's data cable network could be harnessed to boost connectivity in rural areas

Network Rail is seeking private sector investment to upgrade its trackside fibre optic cable network.

Private sector companies have been invited to invest in Britain’s rail telecoms network in return for the right to commercialise spare capacity.

Network Rail says upgrading the communications network would provide performance, safety and connectivity benefits for passengers. It predicts working with the private sector could save the taxpayer up to £1bn in costs.

The significant geographical reach of the national rail network could help meet demand for improved fibre connectivity across Britain. Network Rail suggests its data cables would be able to support the government’s objectives to improve connectivity across Britain, including in rural areas.

Over 16,000km of data cables next to the railway – carrying information essential to running the railway such as signalling for trains, trackside sensors, CCTV, and internet for trains, railway depots and offices – are due to be upgraded.

As Network Rail will not require the full capacity of new cutting-edge fibre optics, it believes there will be sufficient capacity for a third-party to run its own telecoms services. Network Rail says fibre deployment along the railway can be undertaken at lower cost when compared with other deployment methods.

Andrew Haines, Network Rail chief executive, said: “Our telecoms infrastructure requires an upgrade if we are to meet the growing connectivity needs of passengers and the railway itself – particularly to make sure our fibre capacity can handle more data, at greater speed, more reliably.

“This proposal makes good business sense for all parties. We get a cutting-edge, future-proof telecoms infrastructure; the investor gets a great business opportunity; train passengers in Britain get an improved service for years to come; and the taxpayer saves a significant amount of money.”

Transport Secretary Grant Shapps said: “Upgrading the fibre optic cable network beside our railways has the potential to create a more digitally-connected railway, and could lay the foundations towards eradicating the blackspots and phone signal outages which infuriate passengers. Unlocking the skills and expertise of the private sector will benefit passengers and help create a modern railway that connects the country.”

Interested parties are advised to contact Lazard, Network Rail’s advisers on the deal, at lazard_reach@lazard.com

Network Rail will review all expressions of interest and aims to finalise the transaction with a preferred bidder by the end of 2021.

Network Rail's wish list: What investment could deliver

If successful, Network Rail believes the deal would offer a number of benefits for passengers, frontline rail workers and those living in rural areas.

• Train performance: Enhancing telecoms infrastructure will enable an improved railway with different parts of the infrastructure – such as trains, signalling and level crossings – more connected than before, ultimately reducing delays and disruption. For example, new fibre optic sensors can detect landslips near the railway and better monitor the lineside for fallen trees.
• Safety: The deal could enable Network Rail to monitor the condition of railway assets more effectively, meaning that faults can be identified and located in real-time. This would reduce the number of manual inspections required to be undertaken by frontline workers, and supports a more targeted approach to engineering.
• Train connectivity: The deployment of new fibre optic cable along all major rail routes would also see Network Rail playing a part in enabling improved connectivity for train passengers, with benefits for those wanting to stream videos or browse online using their mobile phones. While this deal in isolation would not deliver all of the passenger connectivity benefits, laying the fibre would be an important foundation and enable better connectivity that could then be delivered through upgrades to lineside telecoms masts and on-board train equipment.
• Rural connectivity: Services ran by the investor can also help to support the government’s commitment to roll out gigabit-capable connections across the UK, with £5bn allocated to supporting deployment to hard-to-reach areas.