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Study Finds BT “Fibre Broadband” Rollout Benefitted Cornwall by GBP186m

Friday, July 3rd, 2015 (1:00 am) - Score 753

New research claims that the first Superfast Cornwall contract, which recently completed and expanded the reach of BT’s “fibre broadband” (FTTC/P) network to 95% of premises in the English county (up from the original target of 80%), has so far delivered a local economic benefit worth £186.1m.

The “independent research“, which was conducted by SERIO at Plymouth University and Buckman Associates (Analysys Mason also conducted a 2015 Benchmarking report), estimates that some 12,104 businesses are now connected to the network and that this has also helped to create 2,000 new jobs and protected 2,500. Furthermore it forecasts that the economic benefit will increase to £250m by June 2016.

Apparently the evaluation was undertaken by using a range of different methods including various surveys, which were conducted with hundreds of local businesses, as well as interviews with the project’s stakeholders. As part of that some 49% of businesses indicated that superfast had helped them to generate new sales or access new markets and, of these, nearly two thirds (62.3%) indicated that these markets were national or international.

Average turnover also rose by an estimated £90,848 per connected business compared to just £20,922 amongst non-connected businesses over the last two financial years. The report also clarifies that its total figure reflects how the programme safeguarded £94.3m, created £30.5m from new business start-ups and £61.3m from established businesses, giving an overall impact of £186.1m. Some other figures from the report can be found below.

superfast cornwall broadband economic benefits 2015

At this point it should be remembered that the project was funded by a commitment of “up to£78.5 million from BT and £53.5 million from Europe (ERDF), although it’s not entirely clear whether this cost has been weighted against the above claims. Similarly the report fails to clarify whether 100% of this funding was actually spent.

Ranulf Scarbrough, BT’s Superfast Cornwall Director, said:

We’re very proud of the work BT has done and will continue to do in Cornwall. The region became a template for us to follow in other rural areas of the UK where connecting people to broadband can be extremely challenging.

Cornwall Council has shown tremendous vision and leadership which, combined with the skill and ingenuity of our engineers, has enabled us to go even further than planned. Today, investing in fibre seems an obvious way to transform a rural economy, but let’s not forget when we started the UK was in the depths of a recession and Superfast Cornwall was blazing a trail for others to follow.

People across Cornwall now have a wide choice of high-speed service providers – a benefit of our open wholesale network – and they can reap the benefits of the fibre broadband technology in both their private and professional lives.”

In terms of coverage, we know that thanks to the increased 95% target the network had reached around 241,000 homes and businesses by the end of March 2015 and more recently hit 258,000 in June 2015 with a take-up figure of 66,537 (just a little bit more than 25% uptake); we note how some areas that were upgraded early in the project are seeing take-up in excess of 40%.

On top of that we recently reported (here) that 85,000 of those premises mentioned above were covered using BTOpenreach’s 330Mbps Fibre-to-the-Premises (FTTP) lines (BT’s largest single FTTP deployment across the UK), while the rest were done via their slower ‘up to’ 80Mbps capable hybrid Fibre-to-the-Cabinet (FTTC) technology.

The first contract may have completed, although those who have yet to benefit should note that the Cornwall Council recently signed a new £7.6m contract with BT to make “superfast broadband” (24Mbps+) speeds, using the same technology as before, available to 99% of the county within the next few years (here).

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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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11 Responses
  1. NGA for all says:

    Another economic study which does not reference actual costs incurred.

    Cornwall’s insistence on FTTP (80k+) has shown vision and they have done extremely well to get BT to turn up, when the easier subsidy gathering option is being used in the rest of the UK. They have shown there is no particular reason why the mixed economy solution originally offered by BT and allowed for in the BDUK budgets cannot be delivered, although it may take longer.

    On costs if KC are doing FTTP for c£330 per premise, we could allow BT £400 subsidy for each of the 85,000 premises or £34m. The remaining 160k premises could be served by c800 cabinets at about £25k total average cost. This takes us to the total subsidy of £53m.

    Nobody would accept BT would willing to invest £78m or £312 per premise passed, but direct evidence of £50-£60 capital contribution per premise passed would be welcome indeed. Audit Wales identified a much lower figure c£35 capital per premise for Wales. Even that number would be welcome if it came in the form of a verifiable reduction in the invoices.

    It is good to see the benefits of connectivity being outlined, but we are missing an even greater lesson, which is the relative cheapness of these projects compared to original estimates done is 2009.

    FTTC is likely to be £3bn not £5.1bn (2009) – (with £1.7bn of subsidy), and FTTP if we stop at a manifold on DP is closer to £13bn rather the £30bn estimated in 2009. Given the Cornwall economic numbers why we would we deny our economy this upside.

    1. MikeW says:

      Another attempt to turn the discussion into one about costs. This article is not about costs, nor even about the direct financial benefit (to BT or to Cornwall Council) but to the wider, indirect benefits to the Cornish economy.

      4 paragraphs which entirely fail to discuss any of the benefits in the article, triggering an ongoing discussion below.

      Well trolled.

    2. NGA for all says:

      @MikeW We should at least be allowed to pose the question as to how the full economic benefit be calculated without any comment on costs.

      More progress could be made nationally if the actual costs were reported against the original estimates.

      I am full of admiration for the engineering elements of the Cornish project, but not the secracy associated with the costs.

      Costs are on-topic and should be included in any economic study.

  2. TheManStan says:

    If KC was doing rural, then you could wave those numbers… but they aren’t, they are operating in urban/sunurban with ducts which are in good condition. I very much doubt Cornwall with 75% rural is going to have that infrastructure available, which makes KCs homes passed cost less than useful for predicting costs.

    1. NGA for all says:

      I am not waving numbers, but using the only numbers available to seek clarity on what has been invested by BT. I will be delighted to see confirmed no more than £15m BT capital in Cornwall of the now ‘up to £78m’.

      BT will not be serving single remote properties in Cornwall but clusters which are cheaper to serve by FTTP rather than excess incurring power costs.

      We can see the extreme of BT FTTP in Fell End. £80,000 for 50+ properties, which is another project of note and is worthy of praise.

      A more informed debate on the cost would result in a more radical plan for the UK information economy.

    2. FibreFred says:

      Isn’t this about money saved, the benefits?

    3. TheManStan says:

      You’d better using a mix of Gigaclear and KC costs, that would provide a better guesstimate.

    4. TheManStan says:

      “You’d be better” it should say

    5. NGA for all says:

      @The Facts I do not think so. It is a systematic overstating of costs so the state aid allowable cost budget is pumped sky high reducinig the need for a BT capital contribution.

      I guess no ones cries for ERDF funds, but when this practice bled into the BDUK Framework as evidened by the second NAO report, then the practice will deny Local Authorities an appropriately priced plan where the supposed BT capital contribution was available at a time useful to planning the rollout, a plan that might actually be compliant with the principles of gap funding.

  3. ih says:

    @NGA for all

    Serving remote properties using FTTP is actually precisely what BT has done in Cornwall.

    As a resident, I’ve driven past a lot of total back of beyond places where there’s a shiny new FTTP manifold on every pole, and pole mounted splitters dotted around the place. We’re talking a handful of houses per mile.

    Meanwhile, the more built up areas are more likely to be fobbed off with FTTC. Including my own cabinet, though 30 seconds down the road they’ve put in FTTP in a similarly built up area with the same conditions (overhead wiring, not exchange only, etc)

  4. Bill Lewis says:

    in some areas a few thousand pounds per property passed seems a perfectly acceptable FTTP roll out figure so i doubt the process will be fazed by £300 or so.

    How the economic benefit is calculated based on the return from such high costs for a couple of properties that might pay ~£20 each month baffles me.

    Especially if those properties already have a 40Mbps+ broadband and telephone service via other means!

    Good to see Cornwall are gaining Value for money anyway as the survey suggests.

    If this occurs all over the country then the need for austerity measures will vanish and we will be the wealthiest country in the world (tongue in cheek) 🙂

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