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No Surprise as Wales UK Award GBP425m Superfast Broadband Contract to BT

Thursday, July 19th, 2012 (3:14 pm) - Score 1,839

The Welsh Government (WG) has today surprised nobody by awarding its £425m contract for the Next Generation Broadband Wales tender to BT. But of course it would as the telecoms giant has been the only bidder since January 2012 (here) when rival Fujitsu UK “voluntarily” withdrew due to the “risk levels“.

The Digital Wales Strategy envisages a roll-out of 30Mbps+ capable superfast broadband ISP services to reach 100% of the country’s businesses by the middle of 2016 and homes by 2020. But today’s news aims for 96% of Welsh homes and businesses to have access to “world class broadband speeds” of up to 80Mbps (FTTC) by the end of 2015. Some areas will also get BT’s 330Mbps FTTP service, which will become optional on almost all FTTC lines from next Spring 2013 through an expensive FTTP-On-Demand solution.

The scale of the problem becomes much clearer when you take a look at the following map, which was released by the WG in January 2012 and shows that the vast major of Wales (a largely rural country) has no access to Next Generation Broadband (NGB). According to Ofcom, just 34% of homes in Wales can access a superfast broadband service (23% via Virgin Media’s cable and 17% via BT’s FTTC).

Wales Superfast Broadband Coverage Map

The funding for this project will come from several areas. The Broadband Delivery UK (BDUK) office has already allocated £56.9 Million, while the Welsh Government has put in £58 million and a further £90 million will also come from the European Regional Development Fund (ERDF). In addition BT claims to be investing approximately £220 million in Welsh “fibre broadband” with most of that going towards this specific project.

Carwyn Jones, First Minister for Wales, said:

This is an incredibly important agreement for Wales. Our partnership with BT will see to it that Wales does more than simply catch up with our neighbours; we intend to catch-up, overtake and then set the pace that others will strive to match. The project will transform the broadband landscape across Wales and ensure that local businesses can become global businesses. It will ensure that firms remain in Wales and it will also attract a more diverse range of high growth, high value companies to the country across all our key sectors from tourism to high end manufacturing.

As a result of Welsh Government, UK Government, European Structural Funds (ERDF) and private sector investment, a solution has been secured that will leverage the funding available to achieve best value for the Welsh pound. We have leveraged over £6 for every £1 invested by the Welsh Government.”

Liv Garfield, CEO of BTOpenreach, added:

This project will position Wales as a broadband leader and we are delighted to have signed this contract with the Welsh Government to make it happen. Wales will become one of the best connected countries in the world and will be ahead of the chasing pack. The Welsh Government has shown great vision and we are certain that will pay off in terms of economic growth. The apprenticeships and work experience that we’re offering will mean the roll-out of this next generation network will inspire the next generation of workers.”

Furthermore BT will create 50 new jobs and 100 new apprenticeships, while 320 existing jobs will also be protected as a result of the project. In addition, the telecoms giant will offer 900 young people a week’s work experience, although it’s not clear what that will involve.

But some critics fear that having only one major bidder has put the Welsh Government in a difficult position, giving it less bargaining power to negotiate favourable conditions and raising additional competition concerns within the European Commission (full details).

Richard Brown, COO of Wispa Limited, said:

It is an entirely cynical plan to attempt to ‘big up’ what the Welsh Government are doing, but it is totally clear that the contract will not deliver the levels of improvement necessary within Wales, and in fact it seems that even BT admit that they will not be able to deliver to all of Wales themselves.

Sadly, it is typical of this Government that they will claim a huge win for Wales, but the devil will be in the detail. We had an opportunity to shape the economic and digital future of Wales, but we are about to squander it on the largest white elephant in town: More speed improvements in areas that would have received funding anyway, but where it is desperately required, will continue to receive little or no interest. I’m simply disgusted.”

Like so many similar projects this initiative is now subject to State Aid approval from the European Commission (EC), which is still trying to work through a number of serious concerns with the UK’s overall strategy. As a result no completion date for the project can be set until this is resolved.

Despite the problems we’re sure that many ordinary people will just be happy if the 100% target could actually be achieved.

UPDATE 4:22pm

A comment from the Country Land and Business Association (CLA) has just arrived.

CLA Vice-President, Ross Murray, said:

It is such a vital service for the rural economy but the lack of broadband in rural Wales puts businesses at a competitive disadvantage. Since the Welsh Government first announced its plan to roll out superfast broadband last year, we have waited and waited for further information so a 2015 confirmation is very welcome.”

The priority now is for the Government and BT to address the areas in Wales that currently receive no broadband or very slow speeds. The Government must ensure that BT does not simply increase the speeds of the 10 to 15 percent who already have superfast broadband, but concentrates on those households and businesses that have suffered from poor broadband for the past 10 years.”

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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28 Responses
  1. Chris Conder says:

    I hope the CLA keep an eye on what happens and expose the shortfall for all the people further than a km from a cabinet… just because a property is connected to a ‘fibre exchange’ doesn’t mean it can get NGA, just like it can’t get adsl now. Homes passed is a complete con. And it isn’t fibre broadband unless its fibre to the home. Just sayin. I am glad all the tech reporters are now putting it in inverted commas on their blogs… 😉
    anything from a cabinet or exchange that comes through a phone line is copper broadband. end of.

    1. FibreFred says:

      Cut & pasted to save time? 🙂

  2. New_Londoner says:

    On a more positive note, well done to the Welsh government for securing so much investment for Wales! Better that everyone benefits rather than just a priviledged few, remembering those that decide they really want FTTP can opt for FTTP-on-demand if the “only” get FTTC through the project.

    And as for the CLA, perhaps it should put its energy into sorting out that much delayed wayleave before checking on what other people are up to.

  3. Gadget says:

    True Chris, unfortunately without qualification “homes passed” could mean anything but it is used in this industry.
    Equally you get what you can afford, and if all there is in the pot is £425m I estimate even at the predicted B4RN costs of £1.5k/household (please feel free to correct if this is wrong) that would only do about a third of the proposed current scheme for Wales with fibre to the home if the costs translate into the Welsh geography.

  4. telecom engineer says:

    We should come back here in2015 and see how this panned out. Iam very positive about this. At the end of the day who is better poised to deliver such a scheme? Bt have the tech, tools, manpower and r&d to deliver. Would love to see the fuji tender so we could compare.

  5. Mr Cornwall says:

    This is good news indeed. BT is far the best company to design, plan superfast broadband in rural wales. They have the network, the engineers with the local knowledge, skills and the products. FTTC will provide up to 80MEG for rural communities that are within about 1km of the cab, this would suit most end users and small businesses. Yes FTTP provides more speeds and is future proof, but its also bloody expensive to install to every property – no company will do this in the next few years.
    Yes FTTC won’t suit everyone, if you have a couple of cottages and farms 3-4km from a PCP, which is typical in rural exchange areas you will only get a few MB so no different to ADSL. Unfortunately in this situation it always comes down to cost – its not just BT/Openreach that look at that. Fujitsu pulled out cause of this type of situation!
    The solution for superfast broadband isnt just down to FTTC or FTTP, companies (not just BT) are looking at there is ADSL2 (pretty crap unless next to exchange), there is also 4G/mobile broadband & radio broadband being thought about. Unfortunately i can’t imagine mobile phone companies putting up masts in remote areas either unless they get the demand for it.

  6. The Builder says:

    96% of homes to get upto 80mbps by 2015??? Very terrifying ambition but I hope they achieve it.

    1. DTMark says:

      “96% of homes to get upto 80mbps by 2015”

      This statement is literally meaningless.

    2. New_Londoner says:

      It “literally” isnt meaningless. 🙂

    3. DTMark says:

      “96% of Welsh people to have personal fortunes worth to a trillion pounds by 2015”

      .. would also be equally true.

  7. Michael says:

    This is good news for someone who lives and works in Wales, and also used to be a communications engineer in the days of the GPO !

    What will be interesting to see is what actually happens over the next 3 year build period as a number of technological, regulatory and market factors kick in that will no doubt flavour the solution set.

    Openreach already can use “pole mounted” FTTC/VDSL2 boxes for areas that have sparse population, and no cabinets.

    Why assume that cabinets will never be moved ? May be operationally more efficient to move closer to customers.

    Long line bandwidth accelerators are already in use in other countries to boost ADSL2+ reach and distance [not the BETS technology]

    The UK Mobile Infrastructure Project will create new masts in rural areas over next 3 years.

    Mobile backahaul and small cells are driving fibre backhaul deeper into rural areas anyway.

    4G kicks off (finally) both complementing and competing with fixed broadband

    and BT is already trialling “small exchange bypass” architectures using FTTC and PON …. perhaps enacting its 20 year old exchange site reduction programme

    Should be interesting

  8. Meanwhile in Tavistock a Town outside of any Connecting Devon & Somerset, BDUK funding and not within BT Investment. The future looks more bleak as money and resources are thrown into other Countries.

    When is someone going to stand up for England over superfast fibre broadband matters. The Country is being left to peck at digital crumbs…

    1. Somerset says:

      How do you know Tavistock is not included in Connecting Devon & Somerset?

  9. bob says:

    The WG plan seems to be very optimistic both on reach and technology and it gives no indication as to how they will deliver it

    1. DTMark says:

      Indeed. When do I get to see the details of what I have bought?

    2. Deduction says:

      Details of what you have bought? NEVER if you go buy BTs facts and figures which are wildly over optimistic for homes FTTC reaches already.

    3. FibreFred says:

      We haven’t bought anything have we it’s basically money we paid into the digital switchover that wasn’t needed after all ( surplus ) joe public doesn’t own any assets

    4. Deduction says:

      Surplus cash or not its public cash. Ironically if the latest ofcom report is anything to go by the first 20 odd percent they will roll out to will be the virgin covered areas already. Another waste of tax payers hard earned.

    5. DTMark says:

      In terms of delivery, I actually drove round our nearest town – Alton, Hampshire – yesterday with the dual objectives of:

      1. Finding any business premises with access to FTTC
      2. Finding any residential premises we could move to with access to FTTC

      .. and it’s striking just how limited this “technology” is. The main issue is the siting of the fibre cabinets near the old phone cabinets. Which is not necessarily the best place to put them. There are also nowhere near enough of them.

      Given the maximum distance for it to perform at anything which might resemble modern broadband – the “superfast” speeds which themselves are a very low bar (25Meg down) is between about 500m and 1000m depending on the line quality (a separate issue) there are streets where the cabs are about 800m apart and other areas where only one cab serves large estates or where the estate is fed from a cab that’s just too far away.

      My previous guess was that if every single cab is enabled in the country, about 60% of people would be able to get said superfast broadband and that number is only that high based on population density. Which is quite high in town.

      So well done to BT for “enabling” about 85% of the cabinets, but it’s far from blanket coverage or the 90% superfast originally touted by BDUK. Alton is still waiting for its superfast broadband project to begin.

      If “town” needs about 40% FTTP, and Wales is largely rural, I’m wondering whether enabling every cabinet in Wales is really going to make that big a difference there at all.

      And, yes, every business area in Alton has been methodically left out for no apparent reason. Which makes the cynic in me think that it’s back for another round of the begging bowl when those businesses start escalating this via their councils.

      By which time we’ve largely bought an old phone company a broadband network.

      And it still leaves a choice of one with the expected effect on pricing and quality.

      Perhaps we can get clarification that the BDUK project has been completely abandoned.

  10. Deduction says:

    ^^^^ LOL you have done it now they wont accept cabinets can be that distance apart.

    1. DTMark says:

      What’s even funnier, or sad, really…

      The residential area we quite liked has a fibre cab nearby. At least if I have the postcode right from Streetmap, it’s that one.

      I took it for granted when writing that, that I will be able to get the fibre service.

      For Postcode GU34 1QR

      Our check also indicates that your line currently supports an estimated ADSL2+ broadband line speed of 7Mbps; typically the line speed would range between 4.5Mbps and 11Mbps

      So it might not even be able to get broadband, just a basic narrowband service depending on line length, line quality, the weather, the colour of the eggs the hens lay…

      Dear, dear me. I guess I’ve just been “unlucky” again.

      I know some will suspect I deliberately picked that postcode. And I can assure you that I did not.

  11. FibreFred says:

    “My previous guess was that if every single cab is enabled in the country, about 60% of people would be able to get said superfast broadband ”

    Are you saying that only 60% of people are within 1000m of their cab?

    1. DTMark says:

      No. The statistics produced indicate that around 90% of people are within 1km of “their” cab.

      I’m not sure which article that particular essay was in, but the number was adjusted taking into account exchange only lines and line quality.

      I believe I offered the assumption that around 15% of circuits are what you might call “substandard” (repaired lines, aluminimum etc) which put a big dent in the capabilities.

      The same sort of naff circuitry that means that our, sorry, I mean your, 3680m line can’t even do 2meg and is easily trounced by a 3G modem.

  12. Michael says:

    With the discussions on reach, and the placements of cabinets it is stated that in the Wales award it is for the provision of 30Mbps to the customer as a minimum speed which will be paid for. If the only way to achieve that is move the cabinets closer to customers, build new cabinets or deploy FTTP then I am presuming that is what openreach will have to do.

    The percentage of sites where this is just not feasible presumably makes up the 4% figure. The other 96% should all be above 30Mbps service delivery by end of 2015.

    1. Deduction says:

      Who will be paying for this additional work? The sum of money is currently fixed, what happens if providing to that 96% costs more, or even less for that matter.

    2. DTMark says:

      “I am presuming that is what openreach will have to do.”

      That all depends on the contract, doesn’t it.

      In Rutland the tender was won by BT but there was absolutely no mention of superfast broadband in the announcements. Just that an indeterminate number of people should get faster broadband. Which could mean anything.

      Perhaps MarkJ can get access to these, they must be public documents since the public are paying for it – I’m dying to know what I’ve been forced to buy.

  13. Michael says:

    If the contract is for 30Mbps service to 96% of sites then that is what the budget covers. All bidders would have had to work out what they needed to do to hit that target in their solutions development over the past 18 months. With an infrastructure build of this size there will be an estimation risk that will also have been factored in.

    Over 3 years the costs will no doubt fluctuate for equipment and civil enginneering – both up and down. This is true of any major contract in the world and buyers and sellers manage the environment appropriately. I am not expecting this to be any different.

  14. telecom engineer says:

    I often deliver 30plus megs on 12 to 1500meg of copper. Most will be served by this ok. Also openreach are now recording and replacing cable that is severly affecting dsl via its 1024 programme, ,, in a similar way the have upgraded eside cables in the past. This doesnt mean a new network build ( mayas well go all fibre for that) but for the odd tatty cable falling below dsl spec but ok for phone there is now a route for engineers to request a change.
    And bt do have fttc cabs for eo areas which will be great of long eu lines (which in my experiance breakout close to customers .. so hope for those on 3k eo runs). Also the afore mentioned pole mounted and brickbox dp vdsl for 8plus end users. There are the satalite contracts bt signed as well as 4G such as trailed on bute. All in all a varied mix of tech can meet the needs of this project.

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