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UPD2 Fujitsu Withdraw from all Remaining Broadband Delivery UK Procurements

Friday, March 15th, 2013 (6:16 pm) - Score 2,264

Japanese technology firm Fujitsu UK has, according to the FT, now completely withdrawn from the government’s £530m national broadband scheme (Broadband Delivery UK) and thus left BT as the only remaining bidder in the process. So much for the “competitive tender“.

The move will not come as a great shock to readers of ISPreview.co.uk. Fujitsu UK, backed by Virgin Media, TalkTalk and Cisco, originally envisaged building an ultrafast 1Gbps capable Fibre-to-the-Home (FTTH) style broadband network, using BT’s own cable ducts (Physical Infrastructure Access), that could have reached almost 5 million UK premises in rural areas by 2016.

The idea of building a truly competitive national alternative to BT in rural areas was compelling but, like BT, it would have also required the lion’s share of public funding (£500m) just to get started. On top of that Fujitsu’s £2bn project was largely unproven, aside from a tiny 2011 trial in Greasby on the Wirral Peninsula (here), and many critics doubted its credibility.

Under the original plan Fujitsu aimed to have its first retail customers connected to their Open Access Wholesale Network (OAWN) in 2012. Instead the operator has spent the best part of the past two years withdrawing from most of the relevant tenders, usually citing high “risk levels” (e.g. Wales) or other economic feasibility concerns (e.g. Cumbria, Scotland etc.).

At the start of 2012 Fujitsu UK confirmed that it would now need at least 1 million premises to make its OAWN model work. But perhaps the final nail in the coffin came in September 2012 after the UK government confirmed that Fujitsu UK had now been classified as “high risk” for future IT/BDUK contracts and would thus be subject to additional scrutiny (here). Since then the operator has remained broadly silent.

A Fujitsu UK Spokesperson said:

While we remain supportive of the [BDUK] process and its objectives, we are not actively pursuing opportunities within it.”

The government’s BDUK scheme, which aims to roll-out superfast broadband (25Mbps+) services to 90% of the UK by 2015 (with the last 10% receiving a download speed of at least 2Mbps), is now entirely BT’s domain. In fairness it’s been that way for some time and few expected the outcome of Fujitsu’s efforts to be any different from what has now happened.

Meanwhile councils have been left with fewer options, which could limit their ability to negotiate a better deal.

UPDATE 20th March 2013

The government’s Department for Culture Media and Sport (DCMS) and BT have issued the following statements.

A DCMS Spokesperson said:

The government is keen there is as much competition as possible for these contracts but has always accepted that there are some projects which are not as commercially competitive due to the scale of work and infrastructure required.

We knew right from the start that in some places there would only ever be one bidder, so the framework was designed to function effectively in situations where there is only one bidder. It was designed to be able to deal with this, so there’s no need to rework it

The government is confident that the strong framework put in place delivers projects that have real value for money.”

A Spokesperson for BT added:

If other companies have withdrawn from the process, it is because they are unwilling to invest the large sums that are required without being guaranteed a short-term return. That is despite several of them pledging to make such an investment. In contrast, BT has stood by its promises saying it will invest up to a billion pounds via the process, but accepting that the payback period will be more than ten years.

This approach has proved popular with county councils who are seeking a long term partner who will deliver a network that is open to all ISPs.”

UPDATE 25th March 2013

It looks like Fujitsu UK, which has just received an £800m injection from its Japanese parent, might still bid for a slice of the £150m Urban Broadband Fund (UBF) but it will not return to bid for any of the £530m semi-rural focused BDUK cash. The firm is also still tagged as “high-risk” and thus it will be interesting to see if they managed to win any contracts.

Leave a Comment
32 Responses
  1. Chris Conder says:

    There was never any doubt BT would get all the funding, vital vision (google it) made sure the tenders were written so only they could really apply. BT don’t even need the funding, but it was vital to stop anyone else getting it, and they have succeeded. So now the monopoly will continue to leech its final vestiges of revenue from copper and throttle innovation in digital britain, with very little competition to make them help those on long line lengths. Many of whom are urban, and who cabinets won’t help. This funding was our chance to get some new altnets into the game and make market forces deliver to everyone. Now it isn’t gonna happen. But a few near cabinets can go upto a bit faster.

    1. FibreFred says:

      Or, Fujitsu could have been serious, put up a lot of cash, won all of the bids and created an Open Network for all

      They weren’t serious though, never were, just headline grabbing, withdraw? They were never taking part

    2. TheFacts says:

      Digging out the Vital Vision soundbite again?

    3. TheFacts says:

      ‘few near cabinets’, say how many.

    4. New_Londoner says:

      Same question as on TBB, care to elaborate rather than simply relying on vague statements and innuendo for a change? How exactly did “Vital Vision” influence the way the tenders were written? Or is this another ridiculous conspiracy theory?

  2. Craig Brass says:

    Give it a year or so and I bet Fujitsu take legal action against BDUK / BT saying they couldn’t win bids because of issues with PIA. May well of been their intention all along given the small team they had on this 😉

    1. FibreFred says:

      I doubt they’d have any grounds/be able to sue BT, but BDUK maybe because of its failure

    2. TheFacts says:

      What issues with PIA?

  3. Kyle says:

    RIP to equality, open access, competition and future-proofing.

    1. Matt says:

      Crazy idea but would it be worth creating an E-Petition on the epetitions.direct.gov.uk website to get 100,000 signatures to get the house of commons to debate on the monopoly that is BT? I mean what would happen if BT lost a majority of their customers to rival ISP’s that use the BT copper / fibre network? It’s time to rebel against BT.

      A website, Facebook Page, E-Petition and a good YouTube video could easily go viral if promoted in the right ways. Who’s up for this???

    2. TheFacts says:

      BT is not a monopoly, plenty of companies have code powers enabling them to install telecomms anywhere in the UK.

    3. New_Londoner says:

      You do realise that more than 50% of broadband customers use ISPs other than BT already?

    4. I doubt Matt was referring to the retail side of things. BT has a de facto monopoly on the (rural) local loop infrastructure and BDUK’s actions have further improved on this for them. BT’s strategists pulled a blinder on this one and the muppets at BDUK were either too naive or too stupid to spot what would happen.

  4. Matt says:

    That’s 50% too many to be honest. @Kyle said it correctly above “RIP to equality, open access, competition and future-proofing.”

  5. Phil says:

    Bad news for FTTC as well (for 2014)

  6. dragoneast says:

    On the bigger picture, does this illustrate a risk when you rely on foreign companies to deliver essential infrastructure: at least BT is British and has to make its business succeed here. What would have happened if we didn’t have BT? It would all have gone swimmingly, like cables’ national roll-out no doubt? – perhaps we need to hope so as the nuclear power generation industry is now dependent on the French and Chinese, apparently. It’ll all be successful – and cheap – because there’s no British competition (rip-off), apparently? Better hope so since I’m not sure we’ve got any internet supply yet that operates without electricity? I guess pay any of them enough and they’ll come, so how high do you want your bills to go?

    1. bob says:

      BT is no more British than Fujitsu. It may be a BT registered company but so is Fujitsu UK. BT relies on Fujitsu & Cisco equipment etc for its network

    2. FibreFred says:

      What a strange thing to say! Its not a British company because it uses kit made in China and Japan?

      Lots of things everyone uses every day are made in China and Japan 🙂

      The biggest issue is that no-one wants to build another network, Fuji could have done, they have the money but they didn’t bother.

      Who else is going to create a brand new network, Sky? Talk Talk? It costs a lot of money and broadband prices are rock bottom so there’s not a whole lot of money to make. Instead of constantly blaming BT why not blame lack of investment from other companies

  7. bob says:

    So we now have a BT monopoly outside of the existing cabled areas. Monopolies work against the consumer.
    Where we have had very limited attempts at competition BT have quickly moved into these areas that they had previously stated were not viable.

    We need effective competion to BT. In almost no ther area would such a monopoly be permited. The competition to be effective needs to be at the wholesale level

    The question is what is the best way to get competition into the market. It will need government intervention as no one can compete at present against a monopoly operator

    1. TheFacts says:

      Other utilities have single suppliers into properties.

  8. jeremy says:

    The best way to get competition into the market is to use the £530 million digital switchover fund and enable altnets to build fibre networks in rural areas. Oh wait. We tried that.
    Well the next best way is to make sure that BT deliver on what they have promised all these counties. And not just on paper. Ofcom still believe we all have first generation broadband, the tests this time must be stronger and bT held to account when it is proved they aren’t delivering. I agree with Bob, they only do rural areas when someone else tries to. Its a monopoly at wholesale level and the BT fanboys blethering about open access don’t know the meaning of the word. ISPs simply resell, yes you have a choice of isp, but that means nothing when they are all coming from the same well. It is a monopoly pure and simple.

  9. bob says:


    Other utilities have single suppliers into properties.

    Not true except for Water & Post. The Post is partially open to competiion

    With Gas & Electric you have a choice of supplier.

    A comparision to the BT situation would be if one of the Energy companies owned NG and had control of access to the network

    For true competion in Broadband we need another wholsale provider. To do this they need fair access to the BT ducting and local loop and some protection from BT preditory action.

    Alt nets may have a place in the very rural areas but they are never going to be major player and the fragmented nature of them and the varied techolgies used are another issue

    Whether VM under its new owners will start to expand remains to be seen. VM have made several claimes of starting to infill and buld out from there current areas but it has never happened

    A big obsticle now is the the government and OFCOM have allowed BT to build up this monopoly in HS broadband It makes it very dificult for a competitor to move in when it has 100% of the market in non cabled areas and has control of the key part of the network the local loop. Would you want to move into an area and compete on that basis particularly as it involves major investment and BT can easilly squeeze you out

    1. dragoneast says:

      Surely the biggest problem is who pays for it? Ultimately the customer (even investors expect a return, despite the BoE mooting negative interest rates – that’ll be good for our pensions). Even public funds come with a price tag. So who’s in favour of bigger bills and higher interest rates on your domestic borrowings?

    2. TheFacts says:

      In what way is PIA not fair access?

    3. zemadeiran says:


      Altnets can make a huge difference due to handover and traffic routing between them.

      If you look at how all the network operators work around the world you will see the fact of the matter. If the thousand of isp’s around the world did not cooperate like this in regard to routing one another’s traffic the NET would not exists.

      Altnets are in fact isp’s with back haul to a local ixp. We should create many more multi purpose internet exchange points around the UK in order to facilitate many more altnets which would have negate the need for the BT’s exchanges.

    4. TheFacts says:

      Would be interesting to know where the funding would come from for ‘many more multi purpose internet exchange points around the UK’. Surely ideal locations would be existing BT exchanges.

  10. G1h says:


    The utilities have only one supplier of intrastructure to your property up to the meter.
    Transco supply and maintain the gas pipelines – though you can buy the gas in them from whom you like.
    You local electric distribution company manages the area electric distribution network of cables and wires – though you can buy the electric through them from whom you like.
    With water you have no option, the local water company manages the pipelines and sewage infrastructure and you have to buy the supply & waste disposal from them.

  11. dragoneast says:

    Absolutely nobody has answered the real question which is not technical, but how do you get national infrastructure upgraded when neither consumers nor taxpayers in the UK will pay for it? You have absolutely no alternative but to mend or make do where you can with what resources you can scrimp and save.

    Or get out your magic wand and wave it around, I suppose, which seems to be what most of us believe.

    1. FibreFred says:

      Exactly, how many people actually want FTTH, how many people are willing to pay for it.

      I expect not many for either.

      People in the UK are used to paying pittance for broadband, that won’t change. They’ll want more for less or similar no matter what it costs to provide

  12. NGA for all says:

    Perhaps now without Fujitsu, the BDUK Framework financial model can be changed to reflect BT’s incremental costs minus any actual contribution BT are willing to commit too. With Fujitsu out of the way, perhaps Parliament can force BT to come out from behind confidentialy agreements, discretion to recover costs how it wishes. BDUK/LA and DA funding is c£1.4bn, more that double the amount of their capital employed for fibre access in their last regulated accounts. Fibe Overlay is cheap, the subsidy for FTTC needs to be c£100 a premise pas not the >£250 per premise passed currently being demanded.

    1. bob says:

      Without competition prices will remain high. A company will charge as much as it can get away with and BT has no risk of its customers going elsewhere

      Urban areas can support two wholesale players and that would drive increase in take up as well as driving prices down

  13. Curious says:

    The main thread here is the monopoly that BT have on the UK BB network.

    Issue with this is, and I say this every few months…

    People DO NOT want to pay for their broadband!!!

    Okay, there is a minority (1:100?) that understands how networks are funded and pay the price they believe should be paid to ISP’s for connectivity.

    But the majority of the UK wants broadband for as cheap as possible, and do not care who they pay for it as long as it’s ‘free’ (cheap).

    With this ethos, companies do not see an attraction in building a sustainable network within the UK, as they know any investment will probably not be met by the demand required, as the charges needed to recoup their investment will be seen as too high.

    Put it this way:

    How many people are happy with their speeds?
    How many people are unhappy with their speeds?

    Will the people who are content with their speeds be happy (or even feel obliged) to pay more so those who are discontent become happy? I think not.

    If investment is to be forthcoming then the government need to put a minimum price on broadband.

    Only when this happens will people pay what is right for their service.
    But as we are living in a socialist economy, what we would be asking is sort of communistic, and who would be happy with that!?

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