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UPDATE Rutland’s Fibre Broadband Rollout Finds £1.07m in Savings to Reinvest

Monday, Jul 13th, 2015 (1:33 am) - Score 1,008

The Broadband Delivery UK office has informed ISPreview.co.uk that the Digital Rutland project, which originally aimed to help BT roll-out “high-speed fibre broadband” (FTTC/P) to 97% of the county by the end of 2013, has found “savings” worth £1.07m that can be reinvested to reach near universal cover.

Rutland, which is home to a population of around 40,000 people in just 18,600+ or so homes and businesses, is a tiny and very landlocked rural county in the East Midlands of England. But until recently it also suffered from fairly poor connectivity, albeit with the exception of some developments by Rutland Telecom (Gigaclear) a few years ago and a bit of work through BT’s commercial deployments.

Happily the completion of the first Digital Rutland contract in April 2014 (here), which occurred a few months later than planned, has significantly improved local connectivity. The improvement is aptly demonstrated by BDUK’s most recent Q1 2015 uptake figures, which revealed that a staggering 39.8% of premises in BDUK/BT upgraded areas have taken the service.

The above figure is important because most BDUK contracts also have a claw-back clause, which means that take-up beyond 20% (this figure may vary between contracts) could trigger a return on some of the original investment and that can then be used to extend coverage or improve service performance.

Chris Townsend, CEO of BDUK, said (earlier this year):

As we are drawing to the end of phase 1, we are already reviewing the success that we have achieved to date. We are looking at the additional savings that we are making, because as we are working with BT – I mentioned earlier that we have the smart contract management process in place – we are monitoring all BT’s expenditure and we are already receiving significant savings from the first deployment of phase 1, through the smart contract management.

We are already deploying those additional funds to extend phase 1 further into deeper rural areas. That is going on with each of the local bodies—we are planning that. Once we finish that further deployment, we are hoping to go seamlessly into phase 2 so that there is not a break between them.”

ISPreview has been trying to get some clarification of what these “significant savings” are for the best part of the last 6 months (e.g. claw-back, cheaper deployment costs?), although progress has been slow and that’s partly because we’ve had to wait for Phase 1 BDUK contracts like Rutland’s to fully complete and then be reviewed.

A Quick Look at Known Savings

Elsewhere we’ve already seen how the entirely separate £132m Superfast Cornwall scheme was able to find efficiency improvements in the deployment process, such as by using lightweight overhead fibre optic cables slung between telegraph poles instead of digging up roads, and as a result it became possible to lift the original coverage target from 80% to 95%.

Similarly a report published by the National Audit Office earlier this year predicted that the overall BDUK programme could deliver total savings of approximately £72m by 2017-18, which are said to have arisen partly due to “economies of scale and synergies from running all 44 contracts, and due to the standardised approach to ‘milestone-to-cash’ reporting” (here).

Meanwhile BT’s data to September 2014 states that the operator “spent 38% less in capital costs than its financial model had assumed it would and it had covered slightly more premises than predicted“. Mind you part of this might be because BTOpenreach could have deployed less of their more expensive pure fibre optic FTTP (330Mbps) service and more FTTC (up to 80Mbps), the latter of which is both quicker and significantly cheaper to roll-out.

But all of this must be balanced against the fact that so far most of BDUK’s work has focused on the cheaper / easier areas, with costs likely to rise sharply as the scheme moves out into more challenging or remote rural areas; hence why it’s important to wait until a contract completes before passing judgement.

Back to Rutland..

The good news is that we’re now starting to see details of the final cost “savings” for Phase 1 BDUK projects and Rutland is one of the first to give us any final, if still somewhat limited, information. The original contract was funded by £800,000 from BT and £2.3m from Rutland County Council, including £820k from BDUK and much of this has since been used to benefit around 10,000 local premises.

According to BDUK, the first contract has now resulted in savings of £1.07m and that’s huge next to the original commitment. A spokesperson for BDUK clarified that this was not so much as a result of claw-back – it may take some time for the full benefits of that to be realised – but rather “a combination of savings through project efficiency measures and the deployment of cheaper technologies in areas that didn’t require more expensive methods to deliver superfast speeds” (this may partly allude to the use of FTTC instead of FTTP again).

The plan is now to reinvest these savings into a Phase 2 BDUK contract (Superfast Extension Programme), which is aiming to extend the availability of Superfast Broadband (24Mbps+) to at least 95% of Rutland by the end of 2017; BDUK has also allocated up to another £180,000 of additional funding to this.

Admittedly the original phase 1 contract stated 97% coverage, but that appears to be merely reflecting the raw “fibre broadband” footprint (includes sub-24Mbps speeds) and not specifically 24Mbps+ coverage. Indeed the recent Phase 2 Public Consultation (here) clarified that Phase 1, when combined with existing commercial deployments, had only pushed 24Mbps+ speeds out to about 90% of Rutland’s premises.

But the fact that we now know how much has been saved through Phase 1 means that a contract signing event for Phase 2 is likely to be close, which is interesting since despite being one of the first BDUK Phase 1 schemes to complete it looks as if Rutland will also be one of the very last to sign a Phase 2 deal.

We should point out that the savings found for Rutland may not apply to other counties (the picture will vary). Phase 2 is currently hoping to target upgrades for the villages of Barnsdale, Belmesthorpe, Braunston, Brooke, Burley, Egleton, Essendine, Hambleton, Little Casterton, Lyddington, Ryhall, Stoke Dry, Tickencote, Tinwell and Thorpe by Water.

However on the flip side of this there is concern about the way that BT has been handing back some areas that were previously designated for deployment as part of a separate commercial roll-out. For example, the village of Braunston-in-Rutland was originally due to be upgraded at a cost of around £15k, but BTOpenreach recently re-estimated a cost of £45k and ruled it unviable.

Braunston is now likely to be upgraded as part of the future BDUK Phase 2 project and overall around 1,000 premises (inc. other villages) in Rutland are said to have fallen into a similar category, although it’s unclear what total financial impact this might have.

UPDATE 14th July 2015

We have secured a few extra details from BDUK. To date the Rutland project has delivered 9,416 NGA enabled premises, with 8,551 of those achieving speeds above 24Mbps. Sadly the figures for BT’s final contribution are still said to be “classified as commercial in confidence“, which is despite the fact that the original commitment of £800k was put into the public domain.

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 X (Twitter), Mastodon, Facebook and .
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