Interview with UK Rural Broadband ISP Rutland Telecom - ISPreview
Interview with UK Rural Broadband ISP Rutland Telecom
By: Mark Jackson - May 4th, 2010 : Page 2 -of- 4
"We took a bit of a calculated risk on Lyddington as we suspected it would generate publicity and lead to more enquiries - which indeed it has"

2. How much does the FTTC service cost customers in the area and what do they get for their cash (usage allowances etc.)?

RT ANSWER: £30/month including line rental.
10GB usage allowance
£150 connection fee (imposed on us by BT Openreach - which Openreach do not charge in their own FTTC model!)
£125 disconnection fee (imposed by Openreach) - this creates an odd situation in that if BT Openreach tried to put us out of business by competing at a site, then much of their installation costs could be covered by our disconnection fees if they were imposed - back to that conflict of interest and alleged discrimination.

We need a level playing field with costs reduced as proposed by the current Ofcom consultation - that way we would be happy to compete with them on more equivalent terms.

3. BT viewed Lyddington as being not economically viable for FTTC deployment. RT's similar network can reach about 200 homes, with 50 already connected, but you needed to raise £37k just to build it. 50 homes doesn't seem a lot for such a significant investment, how will RT make its money back on the service?

RT ANSWER: Firstly the average capital cost per home covered by the deployment is just £185 - about 90% less than calculated in the Digital Britain report for rural areas.

Gross income = £25.53/month ex VAT * 50 * 12 = £15k/year + profit from calls & other services.
So 50 customers is about breakeven on this deployment but profitable if selling other services like we do e.g. antivirus, internal wiring, fax2email, Sky TV, computer services. We also look at the bigger picture - Ofcom forcing BT to open ducts so a large element of the install will be reduced (fibre install)

We took a bit of a calculated risk on Lyddington as we suspected it would generate publicity and lead to more enquiries - which indeed it has - hundreds of communities across the UK have now asked us to quote for a similar service. Essentially we saw a niche opportunity - customer pain from low speeds in rural areas - there has to be a business opportunity there.

We could charge more than £30/month in situations where the cost of deployment makes it not quite viable at £30/month (villages with less than 50 premises). We have had approaches from communities willing to pay £100/month, or ones which have key businesses wanting leased-line equivalent services which helps cover the cost of deployment.

If our company was capitalised by private investment we could deploy many networks and have a very profitable niche rural ISP.

4. BT has warned that such villages risk developing a local monopoly unless RT allows rival ISPs access to the new network. What do you say to that?

RT ANSWER: We find the comment ironic. Best look at what we said about this in our blog: www.rutlandtelecom.co.uk/blog

BT was concerned we were forming a monopoly which is bad for customers. This attitude has understandably been received with incredulity on internet forums across the country. It backfires on BT because it treats millions of people who find themselves on the wrong side of the digital divide with contempt. Companies like ours could make a living from the crumbs that BT leave on the table. It is widely known that we have no ambitions to form a faceless national ISP or to buy a beach in the Bahamas - we would welcome the evolution of hundreds of small local companies or cooperatives exploiting the Undertakings to bring fast internet to their own communities.
 
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