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Government Hails Alternative UK Rural Broadband Pilots a Success

Wednesday, February 3rd, 2016 (12:19 pm) - Score 1,449

The Government has today published a new report on the “successful” outcome of their recent Market Test Pilots, which were setup in 2014 to help trial alternative network solutions (fibre optic, satellite, wireless etc.) for bringing superfast broadband (24Mbps+) to remote rural areas.

The original £10 million Innovation Fund actually contained 8 pilot projects (details), which were all intended to test alternative approaches to the normally BT and Virgin Media dominated national infrastructure solutions. However MLL’s project to create a common wholesale OSS / BSS platform for integrating / aggregating via a rural fixed wireless network hit “unforeseen implementation complexity and commercial risks” and eventually pulled out.

The remaining 7 pilot projects include Avanti and Satellite Internet, who are using 24-30Mbps capable satellite broadband; Airwave, Quickline and AB Internet, who are using fixed wireless access networks; and Call Flow and Cybermoor, who are using a mix of fibre optic and fixed wireless technologies. Officially the pilots must all be deployed by March 2016 and a couple have only just started to roll-out.

broadband_uk_market_test_pilots

Overall the report found a positive outcome to the pilots and noted that some of the related networks, such as those run by Call Flow, Quickline, Airband and AB Internet, have already become involved in several regional state aid supported contracts (examples here, here, here and here).

Key Findings of the Pilots:

* Suppliers can successfully mix technologies to deliver cost-effective superfast broadband solutions in hard to reach areas;

* Smaller suppliers can bid for, win and deliver open public procurements at competitive costs, including meeting the necessary EU-wide State aid requirements for receiving public funding;

* Communities can work together with suppliers to create viable commercial conditions for small projects; and

* New partnerships have been fostered, including with other network providers such as Janet and Network Rail Telecom, which will lead to new opportunities to deliver services once the pilots have ended.

At present the Government’s Broadband Delivery UK programme is already aiming to make superfast broadband (24Mbps+) services available to 95-96% of the United Kingdom by 2017/18, albeit mostly via contracts with BT. But once a new state aid agreement has been reached (here) then the likelihood is that altnets will play a bigger role in plugging the final 3-4% (BDUK Phase 3).

The Government is now said to be “discussing with suppliers how to ensure the long term sustainability of their projects” and how the lessons learned can be applied to help local authorities extend the rollout of superfast broadband to those places not yet covered by existing plans.

Ed Vaizey, Digital Economy Minister, said:

“The Government’s rollout of superfast broadband is the fastest of its kind anywhere in the world and is a truly massive engineering project. Our pilot scheme has demonstrated that alternative technologies can help us take superfast speeds to the hardest to reach areas of the UK and I’m very pleased that smaller suppliers are now competing for, and winning, contracts for the next phase of the rollout.”

Andy Conibere, Managing Director of Call Flow, added:

“Participating in a large scale project like the Market Test Pilot programme, has enabled us to improve our processes, as well as driving change in the industry. As a result, we have been able to successfully bid for, and win, significant State Aid funding to build similar solutions in Berkshire.

Call Flow are now planning to build on this experience, and will be bidding for the State Aid funded opportunities in the coming months, with contract values exceeding £50M. Additionally, we are exploring funding options to take advantage of the significant commercial opportunities that still exist that do not require State Aid intervention.”

A full summary of the pilots and their progress can be viewed online, although we’ve also done a quick list below to show what was achieved and some of the costs involved. How much of an impact this will have going forward still very much depends upon the level of flexibility in state aid that the Government can secure from the EU.

Equally it will require local authorities to relax some of their risk aversion to smaller altnet operators and give them greater consideration, as opposed to being dependent upon BT which has become increasingly reluctant to tackle the most remote rural areas where their economic model is harder to develop or sustain.

We’d also add that some of the pilots are still in the early deployment phases and so it’s important to consider that when looking at uptake, similarly a few of the older networks are still deploying to new areas. Likewise the BDUK programme has already shown that take-up needs a year or two to mature before you can start to properly gauge the impact of a new service.

Airwave

NGA technologies: Point-to-multipoint broadband fixed wireless access at 2.4Ghz or 5.8Ghz, Wi-Fi at 2.4Ghz, LTE small cells, and TV white space.
Locations: The Esk Valley and The Upper Dales.

Project size
Premises cleared for State Aid (intervention area): 376
Forecast premises passed by the pilot : 270 (72% of the intervention area)
Forecast premises connected by March 2016: 60 (22% of the premises passed)

Summary project costs
BDUK funding for infrastructure capital costs: £1,286,133
Total infrastructure capital costs: £1,614,204
Public subsidy per premises passed: £3,421
Cost per premises passed (intervention area): £5,979

AB Internet

NGA technologies: Fixed wireless superfast rural broadband network.
Locations: Monmouthshire

Project size
Premises cleared for State Aid (intervention area): 1,696
Forecast premises passed by the pilot: 1,600 (94% of the intervention area)
Forecast premises connected by March 2016: 288 (18% of the premises passed)

Summary project costs
BDUK funding for infrastructure capital costs: £593,200
Total infrastructure capital costs: £636,159
Supplier contribution: £42,959.78
Investment ratio: 93%
Public subsidy per premises passed: £370.75
Cost per premises passed (intervention area): £397.59

Call Flow

NGA technologies: FTTP, FTTC, FWA
Location: Hampshire

Project size
Premises cleared for State Aid (intervention area): 1,670
Forecast premises passed by the pilot: 1,610 (96.4% of the intervention area)
Forecast premises connected by March 2016: 225 (14% of the premises passed)

Summary project costs
BDUK funding for infrastructure capital costs: £1,258,560
Total infrastructure capital costs: £1,258,560
Public subsidy per premises passed: £782
Cost per premises passed (intervention area): £782

Cybermoor

NGA technologies: FTTP, FWA
Location: Northumberland

Project size
Premises cleared for State Aid (intervention area): 287
Forecast premises passed by the pilot: 287 (100% of the intervention area)
Forecast premises connected by March 2016: 215 (75% of the premises passed)

Summary project costs
BDUK funding for infrastructure capital costs: £350,0005,6
Total infrastructure capital costs: £550,000
Public subsidy per premises passed: £1,220
Cost per premises passed (intervention area): £1,915

Quickline

NGA technologies: Testing a range of line of sight, near line of sight, and non-line of sight technologies to build a superfast wireless network.
Locations: North and North East Lincolnshire

Project size
Premises cleared for State Aid (intervention area): 4,211
Forecast premises passed by the pilot: 4,211 (100% of the intervention area)
Forecast premises connected by March 2016: 2,305 (55% of the premises passed)

Summary project costs
BDUK funding for infrastructure capital costs: £2,000,000
Total infrastructure capital costs: £2,447,037.87
Public subsidy per premises passed: £475
Cost per premises passed (intervention area): £581

Satellite Internet

Basic technologies: Satellite backhaul with fixed wireless distribution; satellite direct to home.
Location: Exmoor (x 2) and Mendip (x 1).

Project size
Premises cleared for State Aid (intervention area): 420
Forecast premises passed by the pilot: 280 (66% of the intervention area)
Forecast premises connected by March 2016: 200 (48% of the premises passed – Note, this may well be lower given smaller areas. Take up was expected to reach circa 25% which would give 105 premises connected)

Summary project costs
BDUK funding for infrastructure capital costs: £84,750
Total infrastructure capital costs: £84,750
Public subsidy per premises passed (Avg): £313.00

Avanti

NGA technologies: Satellite broadband wholesale platform
Locations: Northern Ireland: Antrim and Fermanagh; Scotland: Aberdeenshire; Dumfries and Galloway and the Borders.

Project size
Premises cleared for State Aid (intervention area): 23,472
Forecast premises passed by the pilot: All of the intervention area plus most of the UK.
Forecast premises connected by March 2016: 1,000 (capped by project)

Summary project costs
BDUK funding for infrastructure capital costs: £850,000
Total infrastructure capital costs: £954,000 with supplier contributions to date.
Public subsidy per premises connected: £850 (expected to reduce to circa £550 with state aid clawback)

Leave a Comment
22 Responses
  1. Avatar TheManStan says:

    This is positive, good alternatives from other suppliers.

    But the take up rates show how relatively unimportant good BB is to the majority of the population…

    1. Avatar gerarda says:

      The take up rates for most of them are very high – considering people will be locked into other contracts. Cybermoor has a take up rate almost matching the national adsl take up.

    2. Avatar gerarda says:

      I meant fixed telecom/cable take up

    3. Mark Jackson Mark Jackson says:

      Lest we not forget that it took BDUK’s Phase 1 schemes between 1-2 years to start showing some usefully reflective take-up statistics. A combination of issues can get in the way, such as existing contract commitments, local awareness of the service, cost and need etc.

      Certainly there will be many who simply have no interest, but don’t forget that by Dec 2015 only one of the projects had hit 100% of its coverage goal (still in-deployment) and that had a very good rate of 24%. Also some schemes can tolerate lower take-up than others.

    4. Avatar peter says:

      “The take up rates for most of them are very high…”
      “Cybermoor has a take up rate almost matching the national adsl take up….”

      Agreed not to mention all of them with the exception of one by a month have achieved the take up percents in less than 1 year. Kinda makes a mockery of when BT or others state an area is not commercially viable when its take up percent matches what it took FTTC neigh on 4 years to reach. Cybermoors figures for a project that only started around 10 months ago @24% take up is superb. Airwave has been connecting people for only 6 months and have a 17% take up already, thats darn impressive.

      Well done to them all. I suspect take up can only increase and probably at a fair rate of knots.

    5. Avatar Sunil Sood says:

      @Peter. To be fair to BT and. BDUK it’s not just take-up they need to consider but also the costs of installing fibre, power and other equipment to these areas. You would hope take-up in these area would be higher than normal due to the lack of good alternatives.

    6. Avatar GNewton says:

      @Sunil Sood: No, not quite right. The costs of installing are not necessarily higher, it’s not multiple fibre cabinets with its power and equipment requirements. We are mainly dealing here with long-distance wireless technology, bypassing the need for many cabinets or fibre local loops. Backhaul costs to the mast will be more of an issue in rural areas, though probably not in towns.

    7. Avatar MikeW says:

      Unfortunately @gnewton, it is multiple cabinets with power requirements. Wireless APs need power, even if they use wireless backhaul. And, at 20-30 subscribers per AP, the number of mast sites starts to mount up.

      You are only dealing with long-range wireless for the backhaul or for an access network that covers sparse population density or gives slow speeds. If you want to cover reasonable densities with good speed capacity – a real superfast experience – you actually need relatively short range.

      Too long a range, leads to too many subscribers, leads to congestion. All the problems with “over-utilisation” seen on Virgin or satellite, and confidence plummets.

      IIRC, wireless coverage ends up costed at around £800 per property. That still sounds like plenty of money.

    8. Avatar peter says:

      “@Peter. To be fair to BT and. BDUK it’s not just take-up they need to consider but also the costs of installing fibre, power and other equipment to these areas. …..”

      No different to many of the operators mentioned in the story then who have been supplying products well before they had any funding. A couple of them have been operating since 2010 and before

  2. Avatar Craski says:

    The “Forecast premises connected by March 2016” for the satellite schemes are somewhat optimistic arent they?

    The first table for take up at Nov-2015 suggests single digit figures for both satellite schemes but the forecast figures by March 2016 suggest far more.

  3. Avatar MikeW says:

    Take-up figures are perhaps going to be tricky to judge comprehensively.

    When I talked to the Airwave guys about the pilot in the Yorkshire Dales, the impression I was given was that the homes to be covered in the pilot would be installed free of charge … and the pilot budget included funds for this, but didn’t include money for hardware for every home – just a limited portion.

    I got the impression that they were willing to include more homes. Presumably that would require them to find their own funding … on a pilot that might exist for only 2 years.

    It is probably a no-brainer to volunteer for one of the free slots, but less so if you have to pay yourself.

  4. Avatar Patrick Cosgrove says:

    At last. At flippin’ last. Now we need MPs in Shropshire, Herefordshire, Devon and Somerset to call for the remaining Phase 2 monies to be spent on hybrid approaches like Callflow’s and Cybermoor’s.

    1. Avatar Phil Coates says:

      …and NOT Satellite.

    2. Avatar fastman says:

      so you advocate a SLU monopoly with no supplier choice >

    3. Avatar MikeW says:

      It looks like BDUK are accepting this as a distinct possibility.

  5. Avatar Patrick Cosgrove says:

    Certainly not satellite. Watch today’s DCMS select committee on Parliament TV to see the man from Avanti Satellite trying to pull the wool over the committee’s eyes. They weren’t fooled. The man from Wispire was more convincing.

    1. Avatar MikeW says:

      I figured this document was released to coincide with today’s notspot summit. Bad timing for the DCMS committee people to not be involved in that!

    2. Avatar TomD says:

      I was surprised to see the document does not include mention of the word “latency” given there were satellite trails involved. Surely to be an effective trial someone must have mentioned the problem of latency somewhere?

    3. Avatar TomD says:

      To answer my own question: I suppose only those for whom latency was not an issue signed up to the satellite trial – anyone for whom it was an issue would not have taken it up or been accepted for the trial.

  6. Avatar Chris says:

    As far as I am aware nobody in the proposed Somerset trial of Satellite Internet has taken up the service. At most there were a handful of people interested but they may have given up due to delays. I think most people saw satellite as an expensive downgrade on their already pathetic internet service.

    I think take up in Exmoor was slightly better because some of the houses had no internet at all.

  7. Avatar BarryW says:

    I can confirm the there is no interest in Priddy Somerset in the costly and high latency satellite trial.

  8. Avatar chris says:

    Whereas B4RN with no public subsidy have 70% take up and are providing connectivity over a very large rural area. Actual connections, not the farcical homes passed ones. And not a miserable upto 24Mbps or upto 80Mbps but full fat gigabit for £30 a month with 2ms pings.

    And DCMS still ignore it. Although it did get a mention in the report, even though it wasn’t a pilot.”Creating a standardised offer for communities can make this easier. Key learnings have come from projects such as B4RN in the north of England,”

    I wonder what they have learnt?

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