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JT Warns of Fibre Optic Broadband Rollout Delay for the Island of Jersey

Saturday, January 3rd, 2015 (7:54 am) - Score 1,629
gigabit jersey uk jt

The roll-out of a new 1Gbps capable Fibre-to-the-Home (FTTH) broadband ISP network on the English Channel Island of Jersey, which is being conducted by the state-owned JT Global (Jersey Telecom), looks to be under threat after the local government (States of Jersey) requested a £6m dividend from the Telco to help it plug a £31m budget deficit for 2014 (rising to £39m in 2015).

The latest problem for the island community was first revealed during an early budget announcement in July 2014, which saw Senator Philip Ozouf confirm that income tax revenue was lower than forecast and spending had gone higher.

Funnily enough we recall that Mr Ozouf had in 2013 been heralding the benefits of a small 1% reduction in the rate of income tax (26%) and at the same time he even outlined plans to use some of the islands £720m “strategic reserve” (government savings fund) to pay for a new hospital. So perhaps we shouldn’t be surprised that the deficit problem has returned.

According to the BBC, Jersey law effectively requires that the deficit be tackled before a budget can be presented to the states for debate and as such Mr Ozouf has been busy hunting for additional funds to help him plug the hole, part of which will come from asking state owned companies like JT for more money.

The problem is that JT’s £41m+ Gigabit Isles project, which is currently aiming to rollout FTTH to around 42,000 premises (990km of new fibre optic cable) by the end of 2016 (plus 5,000 on Guernsey), is part funded to the tune of £19 million by the States of Jersey via a freeze on dividend payments. In other words, any move to take back money from JT will inevitably hit that effort.

The latest data reveals that JT’s fibre optic network had already managed to connect 11,000 customers to the new service, which is up from 10,000 in August 2014, 8,479 in June 2014 and 7,600 in March 2014. Graeme Millar, CEO of JT Global, has already warned that the lost funding would stop it from achieving the original 2016 completion target and the Telco is currently reviewing their future roll-out plan.

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Mark Jackson
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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13 Responses
  1. Avatar Steve Jones

    A figure of £6m doesn’t sound much, but it’s around 5% of JT’s annual turnover. That percentage of BT’s turnover would be about £900m. BT’s total dividend payments were £778m in the most recent financial year. So the dividend “request” – from its sole shareholder – is not wildly disproportionate, but it’s clearly a significant factor on the funds available for capital investment.

    Of course it may well be possible for JT to borrow to maintain the liquidity necessary to complete the project, although in the most recent accounts I can find (December 2012), there had been a very significant increase in both long and short term creditors. If there are more recent accounts available, they would make interesting reading.

    Anyway, what this does clearly demonstrate is the rather tight relationship that JT has with local political objectives and why, with political will, things can be achieved that won’t work in the UK’s far more diverse commercially-driven market.

  2. Avatar Bob

    JT should send a pamphlet to each JT customer explaining the delay and that the government is at fault.

    Then maybe the people will hold their local representatives to account.

  3. Just imagine what our lovely politicians would get up to if BT, or indeed Openreach, were taken under state control! 🙂

    • Avatar Steve Jones

      If you want to factor those numbers by the relative size of population (around 70 time higher in the UK), that £6m would be a £4.2bn state dividend take. The £42m (roughly) project would be £29bn.

      So scaled up, these are not small numbers.

      nb. the old GPO and PO telecommunications outfits used to be started of capital investment, partly because the Treasury used to take a cash dividend every year. Although it also ought to be noted they were astonishingly inefficient. Prior to privatisation, almost 260,000 people worked for PO telecommunications which, in those days, was dominated by the basic phone services.

    • Avatar Steve Jones

      “starved” on “started” of course…

    • Avatar TheFacts

      Inefficient because…

    • Avatar Steve Jones

      Inefficient, like very many UK companies and organisations in the 1970s/80s, through things such as overmanning, lack of investment, poor management. The Post Office was hardly alone in that period (although it might have been one of the worst).

      Bear in mind that in 1984 the great majority of local exchanges were of the Strowger type (invented by an American undertaker in 1891). The last one wasn’t decommissioned until 1995. They were unreliable at dialing numbers (albeit being incredibly rugged), introduced lots of noise through all the contacts and required massive amounts of maintenance due to all the moving parts. It wasn’t helped much as the main equipment suppliers to PO Telecoms were cosy cartels (Plessey, GEC etc.) used to making guaranteed money from a state monopoly. System X took ages to develop and roll-out (at immense cost) and achieved virtually zero foreign sales.

      As with much of UK industry, the whole sorry mess collapsed in the face of foreign competition once the cash cow disappeared. (Electronic telephone switches were massively expensive in those days, but the System-X ones were probably the most expensive of all).

      So, it’s not just the tale of an inefficient state business, but a whole industry. The result? Well, there’s very little of it left.

  4. Avatar PhilT

    Peter Cochrane’s demonstration project. Not going so well.

  5. Avatar Bo Selecta

    “English Channel Island of Jersey”.

    English? Really?

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