BT Bid for Troubled UK South Yorkshire Digital Region Broadband Network

The troubled Digital Region (DRL) network, which spent £100m of public funds building an alternative wholesale supplier to BT that could help 80% of premises in South Yorkshire access superfast broadband ISP services, has ironically whittled the bidders in its tender process down to a choice of either BTWholesale or ETDE SA.

The FOR SALE sign (tender) went up in May 2012 after the projects managers, which recently injected another £10m from the public pursue to help keep the network alive until the end of this year (here), finally realised that they needed to find a private company (e.g. ISP) that could continue to operate the network for another 7 years (some public funds could still be used in support).

It’s understood that DRL initially received 29 expressions of interest during May 2012, which was cut down to three bidders before a final Pre-Qualification process and subsequent stages resulted in only two viable candidates being left.

Final DRL Tender Shortlist (Bidders)

* ETDE SA (Entreprise de Transport et de Distribution d’Electricité) the Energy and Services Division of Bouygues Construction

* BTWholesale Managed Services

Few will be surprised at the inclusion of BTWholesale and indeed many expected them to bid, although it’s hard to ignore the significance of today’s confirmation. A local authority that spent over £100m building a network, because BT found it economically difficult to do the work, now faces the potential prospect of selling it back to that same operator. Ho hum.

Readers might recall that Barnsley Council’s CEO, Phil Coppard, last year even went so far as to claim that BT was trying to “kill” the project by limiting access to vital data and over-charging for access to its telephone lines (here).

David Cowell, CEO of Digital Region, explained:

“We were very impressed with the level of interest and quality of the submissions received. DRL attracted a total of 29 expressions of interest and the companies that have progressed to the next stage presented extremely high quality responses.

Over the next few months the DRL project team will work with the shortlisted bidders to develop proposals that deliver quality and value for money for residents and businesses in South Yorkshire. This is a significant step in moving towards an operation that is sustainable in the long-term and no longer reliant on the public purse. Public funding could only ever be a transitional phase as the business moves to a self-supporting model with a new partner.

This is a rigorous process that is moving along swiftly and we are on track to deliver the project successfully.”

The next stage of the tender process will be the invitation for the submission of detailed solutions by the shortlisted bidders in July 2012, which will be followed by an invitation to submit final tenders in September 2012. DRL hopes to award the contract by December 2012, just before its money runs out, though we’d be surprised if it didn’t still require yet another injection of life from the public purse.

In many ways BTWholesale is perhaps the most logical choice here, although we suspect that DRL would prefer to pick the non-BT route if possible. By contrast ETDE SA isn’t exactly a well known name in the UK telecoms market and it’s difficult to know what they’d get from such a contract.