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Fujitsu Withdraw from Broadband Projects in Cumbria and North Yorkshire UK

Wednesday, July 11th, 2012 (11:21 am) - Score 1,191

Japanese technology giant Fujitsu UK, which is one of only two major telecoms operators left in the government’s Broadband Delivery UK (BDUK) project to improve the country’s national internet infrastructure (the other is BT), plans to withdraw from bidding in two further regions – Cumbria and allegedly also North Yorkshire.

The BDUK project, which aims to roll-out superfast broadband (24Mbps+) services to 90% of the UK by 2015 (with the last 10% receiving a download speed of at least 2Mbps), has in recent months come under increasing pressure as various operators (e.g. GEO, Cable & Wireless etc.) have exited the process citing economic and competitive concerns. At the same time the European Commission (EC) has stalled approval of some new plans until they can resolve a number of related differences with the UK (here).

Smaller ISPs have also accused the government of setting the bar too high (i.e. it’s only friendly to big Telco’s like BT) for them to get involved, which has resulted in many expecting BT to win the lion’s share of public subsidy. So far the evidence appears to bear out those fears, with Fujitsu yet to win any of the tenders on offer. Meanwhile BT has nabbed Rutland, Lancashire and is the only option left for Wales and the Scottish Highland & Islands where Fujitsu is no longer taking part.

The problem has also been complicated after the Cumbria County Council (CCC) last month rejected the only two available bids from BT and Fujitsu, instead asking them to go away and return with improved offers (here). Now Fujitsu has decided not to return.

Duncan Tait, CEO of Fujitsu, told the FT:

We withdrew from Cumbria because we cannot currently see a clear path towards a mass market that is required to attract leading retail service providers. We continue to monitor the market place and see where we can get this to make sense.

We will look at each on its own merits and see if there is a way to make it work and get to the scale we need for our anchor tenants.”

Fujitsu originally planned to build an ultrafast 1Gbps capable fibre optic (FTTH) broadband network that could have reached 5 Million UK premises in rural areas by 2016, although not unlike BT it would have required almost all of BDUK’s then £530m budget until 2015 to do it.

That’s a tough ask for a project that has yet to prove itself beyond the confines of a tiny trial in Greasby (Wirral Peninsula). The operator is now understood to require at least 1 million premises in order to make its model work, which looks increasingly unlikely to happen.

On top of all that the contract for North Yorkshire is now also expected to go BT’s way, which would naturally result in Fujitsu needing to withdraw. Many fear that problems like this might not be resolved unless stiffer regulation is introduced to make the BDUK process and market as a whole more open and flexible to non-BT providers.

Leave a Comment
7 Responses
  1. Avatar FibreFred says:

    Gasp and then it was one. (or should I say won)

    The BDUK process is a shambles and has resulted in a total waste of money. Fujitsu as expected amounted to nothing, so much for the Open Network Consortium I thought it was all hot air and here’s the proof.

  2. Avatar Rob Turner says:

    Well what a surprise Fujitsu withdrawing their bid, it seems like they are full of hot air but when it comes down to getting the job done they are not willing to back it up with hard cash, at least that’s how it looks to me.

    BT takes so much criticism but if they were not investing any capital then there would be no broadband rollout to the final third.

    Thie whole BDUK programme seems a huge mess, lets hope they manage to smooth out the issue regarding state aid with the EU otherwise the whole thing will have been a monumental waste of time and money.

  3. Avatar Bob says:

    The BDUK program was alway going to be a shambles and so it has proved to be.

    What we need in the UK is a second wholesale network. To achive this probably needs VM to be split into two with a VM retail & VM wholesale. It also needs proper access to the BT ducting in order to extend out coverage.

    The BDUK approach of involving hundreds of LA’s and quango’s and the building of dozens of tinybespoke sysytems was never going to work.

    1. Avatar FibreFred says:

      Why do VM need access to BT ducting, would BT get access to the VM ducts? If so it sounds like fair play to me

    2. Avatar New_Londoner says:

      Virgin already has access to the Openreach ducts (and poles) through PIA. Agree with FibreFred it should be reciprocal.

  4. Avatar DTMark says:

    Oh look – market failure again.

    I thought I’d Google what the mission statement of BDUK was/is since it appears to have achieved the sum of precisely nothing so far towards an ubiquitous superfast broadband network, which made me wonder what the starting point was.

    So did someone else. And the first comment in the thread reads like everything I’ve ever said on here rolled in together.

    http://br0kent3l3ph0n3.wordpress.com/2011/07/15/bduk-misson-creeps-to-include-very-high-speed-city-networks/

    This one says much the same

    http://www.computerweekly.com/blogs/when-it-meets-politics/2011/06/will-the-bduk-framework-do-sig.html

    I did actually find a wooly article on the relevant website

    http://discuss.bis.gov.uk/bduk/faqs-old/

    And it’s laughable. Is BDUK like the government, where you have the responsibility for running the economy vested in someone with no business or economic experience twice running? It appears so.

  5. Avatar bob says:

    BDUK are going down a similar approach to what happened with Cable. With Cable the UK was soplit up into lots of small areas with dozens of different companies providing cable with almost as many technologies and systems. It did not work and it has taken about 25 years to unscramble the mess. We are now going to see a similar situation with HS Broadband

    What is really needed is a second UK wholesale network. Look at the different behaviour of BT where they have competion from VM. THey role out to those areas very quickly. Where they have no competition they do not rush and by not rushing it also increases their chances of public subsidies. To date about 96% of the public subsidy fubding has gone directly to BT and indirectly the benefit to BT is even higer.

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