The £100 Million
EU funded Digital Region
open access wholesale ISP project, which aims to deliver average FTTC
based broadband speeds of 25Mbps to 97% of businesses and homes in the South Yorkshire
UK region, could be stalled due to a low take-up
by local people and growing competition from BT's comparable 40Mbps capable superfast broadband services in some of the county's most profitable areas.
In June 2011 Digital Region claimed that its rollout was already "well underway
", with more than 50% of the final network now complete
. Apparently 30 telephone exchanges have been upgraded, which is out of an initial 36 planned for phase one and a total of 54 for the complete network in 2012.
Crucially the project always intended to cover the "final fifth
" (17-20%) of its network development through profits, although the low uptake (some customers claim that their service prices are simply too high) has meant that such income is now falling well below expectations. On top of that the company is publicly owned and must also pay back millions of pounds in loans to local councils, which has lead to some serious questions over its long-term viability
and a "material uncertainty
" with its accounts.
Digital Region's CEO, David Carr, commented (Yorkshire Post):
"It was always the plan to have the final 17-20 per cent built from our revenue. The revenue forecasts were over-emphasised when the plan was first put together. In the original plan the last 17 per cent was done more quickly, and we’ve had to revise that.
We’ve got funding for the first 80 per cent of the population, and that will be complete by the early part of next year. But this is still absolutely a 97 per cent project. It’s in our plan to roll out to the final 17 per cent (of properties) - it’s just a question of timing."
One significant part of the problem is that the Digital Region project, which is acting as an open access wholesale network, has failed to attract interest from enough of the country's major broadband ISPs (e.g. TalkTalk, Sky Broadband
etc.). The troubles have been repeatedly blamed on BTOpenreach
and a series of related disputes.
BT owns the existing telephone network but is also Digital Region's main competitor. The situation has even led Barnsley Council's CEO, Phil Coppard, 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. BT
claims that its prices are fair.UPDATE 2pm
A related report in the Yorkshire Post suggests that an investigation by Ofcom
could force BT
to drop some of its rental prices to the Digital Region project, albeit by no more than 10%. Apparently this will not be anywhere near enough to resolve the problem.