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BDUK and BT Push Superfast Broadband to 3.31 Million Extra UK Premises

Thursday, November 12th, 2015 (10:06 am) - Score 1,214

The Government’s Broadband Delivery UK initiative, which is primarily working with BT to make fixed line superfast broadband (24Mbps+) services available to 95% of the United Kingdom by 2017/18, has ended Q3 2015 by confirming that 3,311,843 extra premises have now benefited from the effort.

The programme, which began in 2010 after it became clear that private investment alone would struggle to expand the coverage of related broadband services beyond around 70% of the country (BT and Virgin Media complained that going further was “not commercially viable“), currently consists of two primary phases.

Phase one is supported by £530m worth of state aid and aims to push superfast connectivity to 90% of the UK by 2016 (4.2 million additional premises passed), while phase two added £250m to the pot and targeted 95% coverage by 2017/18. The EU and local authorities have also helped to match fund with this, bringing the total public investment to around £1.7bn.

So far BT has won the lion’s share of related contracts (they’ve often been the only bidder) and predominantly focus on meeting the target by deploying their 40-80Mbps capable Fibre-to-the-Cabinet (FTTC) technology, with a few pockets of ultrafast (330Mbps) Fibre-to-the-Premises (FTTP) and some alternative solutions in niche locations (e.g. FTTrN, FTTB, WTTC).

Broadly speaking the project’s progress has been reasonable, with +406,079 additional premises (coverage) being added in Q3 2015. Put another way, if the current rate of progress continues then we should reach close to the 4 million mark by the of Q1 2016 and then the first 90% goal would be within touching distance (a little later than planned under the original end of 2015 date).

However if the Government wants to keep pace with Europe’s Digital Agenda goal (i.e. 30Mbps for all with 50% subscribed to a 100Mbps+ service) then they’ll still need to achieve universal coverage of superfast broadband by 2020.

Otherwise a breakdown of the latest progress can be found below, which excludes match funding from local authorities, the EU and BT’s own contributions. The premises passed figure only reflects those able to receive superfast speeds of greater than 24Mbps (Megabits).

bduk broadband performance update q3 2015

The figures above are cash based (i.e. when grants are made or budgets transferred). On an accruals basis, which matches costs incurred to the timing of delivery, cumulative BDUK expenditure to end-September 2015 has been estimated as £412,002,461 and that equates to 8,038 premises covered per £million of BDUK expenditure (expenditure is higher for this because the work has been delivered in advance of payment).

It’s worth pointing out that BT has also recently announced plans to bring speeds of up to 300-500Mbps to “most homes” over the next 10 years by rolling out G.fast broadband technology from 2016/17 (here), although this will currently only benefit their commercial footprint and not BDUK areas. Virgin Media have a similar expansion project for their ultrafast cable network (here).

The Government are also imminently expected to announce a new phase three investment (here), which is set to focus on tackling the significantly more expensive and challenging problem of catering for those in the final 5% (i.e. predominantly remote rural areas and a few disadvantaged urban locations). We also expect to get some more details about funding and the new 10Mbps USO pledge (here).

In keeping with this BDUK has been trialling a number of alternative network solutions, such as Satellite and fixed wireless technologies. The Budget 2015 announcement has similarly hinted that a not especially appealing Satellite subsidy could help to cater for the final 1-2% of remote UK rural areas, while the rest would be done via other methods of connectivity.

Funding for phase three could represent a mix of £100m extra from the BBC TV Licence fee after 2017, as well as making use of up to £129m from BT’s Clawback linked reinvestment / savings from phase one / two (here) and the worrying possibility of a tax on broadband ISPs has also been suggested (here).

Overall the progress so far has been reasonable, although both phase two and three will focus on increasingly difficult to reach areas and that could impact the targets as these take longer to reach (BT has hinted that the 95% target could slip into 2018). A number of alternative ISPs, such as Gigaclear, AB Internet and Airband, have also won contracts under phase two and we expect more of this in phase three.

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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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