TfL scores telecoms bids

Telecoms

Transport for London is assessing final bids for a commercial partner to fund, build, operate and monetise telecommunications infrastructure on TfL assets.

The arrangement will deliver a long-term revenue stream for TfL subsidiary Transport Trading Ltd. 

The concessionaire will: 

• deliver cellular coverage on the London Underground to all four UK mobile network operators (EE, O2, Vodafone and 3), covering all technologies they require and are prepared to pay for (2G, 3G, 4G and 5G); 
• deliver an enhanced public Wi-Fi service on the London Underground to replace the expiring Virgin Media concession; 
• deliver a new fibre network throughout the London Underground; 
• use streetscape assets such as lighting columns for small cells and other radio technology to improve current 4G mobile services and support 5G; 
• deliver connectivity to public buildings using grants; and 
• deliver the Home Office’s emergency services network on the London Underground (and certain other specified locations on the Docklands Light Railway and the London Overground). 

Final tenders from the three bidders were submitted on 6 March and TfL plans to sign the final contract in late May. 

Shashi Verma, TfL’s chief technology officer, told the finance committee that the initial contract duration would be for 20 years, with an option for TfL to extend for a further five. 

He said 20 years was “the minimum period of time a concessionaire would need to recoup the considerable investment required, anticipated to be in the region of £350m to £450m, and make a reasonable rate of return”. 

TfL’s business plan assumes it will receive £25m from the concessionaire in the first five years. Revenues will be in the form of fixed and variable payments, with the fixed fee starting at £1.5m and  rising to £5m in year five, and thereafter index-linked to RPI.