EuropaSat CEO Warns UK Satellite Broadband Subsidy Too “Complicated”

The CEO of ISP EuropaSat, Andrew Walwyn, has warned that the Government’s rural broadband subsidy scheme for meeting the 2Mbps Universal Service Commitment (USC) is suffering from low uptake because its “very complicated” and the subsidy (up to around £350) is too small.

The £60m scheme, which launched at the end of last year (full details) and aims to help 300,000 of the most remote rural premises in the United Kingdom (note: Wales has a different scheme) to get a better than 2Mbps connection, is known to have suffered a slow start (here).

According to Walwyn, the main problems stem from how the “customer ordering process is very complicated“, plus the “subsidy isn’t as generous” as the Welsh scheme (up to £400 to £800 per voucher) and consumers face a “postcode lottery” in regards to whether or not they can even get the subsidy (it’s only usable in areas that won’t benefit from the fixed line Broadband Delivery UK programme). On top of that Satellite still has a flaky reputation.

Andrew Walwyn said (Cable):

“Satellite broadband definitely has a reputation issue that needs to be addressed – just as the fixed line telecoms market has evolved over the last five years, so has satellite broadband – but few people know and understand this.

They think that the service is still the same, which isn’t the case at all. Satellite is evolving much more quickly than any other type of broadband technology – speeds have doubled in less than two years and data allowances are increasing even faster.

The market mirrors the pace of change that happened in the mobile phone industry – looking ahead the speeds and data are set to increase at an even faster rate, which will make it even more appealing to consumers and businesses.”

Certainly Satellite technology has improved, although high latency, meagre / expensive usage allowances and sharp drops in peak time speeds or hefty throttling to manage network congestion all continue to be familiar bugbears (more details). Likewise Satellite doesn’t work everywhere, such as when you’re not allowed to install a dish or the line-of-sight is blocked by a steep hill, high trees or buildings etc.

It’s interesting to note that the Government initially had similar uptake problems with their business-focused Connection Voucher scheme, although they later solved that by simplifying and expanding its availability. A big advertising campaign also helped to raise awareness, but so far we haven’t seen anything similar for the USC subsidy.

However the USC subsidy isn’t only available via Satellite ISPs and the Government has recently signalled that some fixed wireless and other alternative broadband providers can also be included. So far we’ve seen both altnet ISPs Quickline and Wessex Internet join the list of approved suppliers (here and here).

Past experience suggests that the Government will eventually find a way to make the subsidy more attractive. A good place to start would be by raising the size of the vouchers (we’d take it to £500 in order to cover most satellite hardware and install costs) and follow that with a stronger advertising campaign.