Greater Manchester Extend “Fibre Broadband” Rollout to Extra 2900 Premises

The £15m Get Digital Faster project, which is already working to extend the coverage of Openreach’s (BT) “fibre broadband” (FTTC/P) network to 47,000+ premises in the Greater Manchester (England) area, has announced that a further 2,900 will also benefit thanks to clawback of £1.4m.

The project, which excludes Manchester itself and Salford (they’ve already received investment from elsewhere and BDUK funding isn’t really intended for dense urban areas), is focused upon improving connectivity in the main local authorities of Stockport, Bolton, Bury, Oldham, Rochdale, Tameside, Trafford and Wigan.

So far the effort has already made FTTC/P services available to around 47,000 additional homes and businesses via roughly 580 cabinets, with 45,000 of these able to receive “superfast broadband” speeds of 24Mbps and above. This puts the roll-out within touching distance of its original completion target (Spring 2017).

BT has also confirmed that service take-up in related areas now stands at 25% and this has resulted in a £1.4 million gainshare. Under the contract BT are required to return part of the public investment when adoption of the new service passes beyond the 20% mark in related intervention areas, which can then be put towards further improvements.

As a result of this an additional 2,900 premises (2,500+ of these will receive speeds of 24Mbps or faster) are now set to be put within reach of the service during 2017 and 2018, which is on top of the existing 47,000+ premises target.

Matt Hancock MP, UK Minister of State for Digital, said:

“Nine out of ten homes and businesses in the UK can now get superfast broadband, and it’s brilliant news that the high take-up rate in Greater Manchester means we can now take the rollout of superfast speeds even further. This will provide another boost to the local economy and is all part of the UK Government’s work to make sure Britain remains a digital world leader.”

Tony Morgan, BT’s Programme Director, said:

“The Get Digital Faster programme is going from strength to strength. We are seeing strong take-up of fibre broadband across the area and this is helping us reach even more communities. BT is committed to rolling out this transformational technology as far as possible and already, more than 98 per cent of homes and businesses across the eight authorities are currently able to access fibre broadband.”

BT estimates that “more than” 98% of Greater Manchester households and businesses can now get “fibre broadband“, although they don’t specify whether this includes those who experience sub-24Mbps speeds on the same network. By comparison the coverage of “superfast” performance in Manchester itself is currently closer to 95% and Salford does a little better.

The extra 2,900 should get the project a smidgen closer to achieving nearly universal coverage, although there’s still a fair gap to fill and it’s always the last bits that tend to be the most expensive or difficult to tackle. Sadly the project’s official website is sparse on detail and devoid of useful information about its exact roll-out plan for the next year or two.

1. Steve Jones

   January 31, 2017 at 12:34 pm

   25% must be one of the lower take-up rated for a BDUK project. Also, I thought that BT had already reworked figures with accelerated clawback/gainshare based on a 30% assumption (as opposed to the original 20% target). It would be interesting to know if the £1.4m is based on the 30% figure. I suppose in the big picture, it won’t have made a huge difference, but to pinch a slogan, every little helps.
   • Mark Jackson

     January 31, 2017 at 12:59 pm

     The 20% is expressed as the starting point for clawback above (“beyond the 20% mark”) and as we understand it the level of gainshare available grows as take-up rises. However I don’t believe the Manchester project is using the latest base-case assumption for take-up in BDUK areas (33%).
   • NGA for all

     January 31, 2017 at 1:40 pm

     More relevant would be to understand how gap funding principle works in this case.

     What capital is BT contributing given it has managed to fully fund Salford with c32 cabinets and a comparatively low average premise count?

     If BT is accessing subsidy for in-filling large cabs in places like Atherton, then gap funding and clawback measures will need to work overtime to prevent a distortion occurring against Virginmedia.

     The clawback amounts without reference to the BT capital contribution still lacks transparency.
   • Steve Jones

     January 31, 2017 at 2:48 pm

     So it’s 33%, not 30%. My mistake.

     @NGA the clawback is what it is and defined in the contracts. Clawback payments are made under gainshare which shares the benefit between the local BDUK project and BT according to the capital contributions by each partner. So if BDUK contributes 50% of the capital, they get 50% of the expected benefit of the higher takeup and BT get to keep the other 50%. If you are expecting the details of the commercial benefit to BT to be published and how that is calculated, I suspect you will be waiting a long time as that will undoubtedly be commercially confidential, and the NAO report specifically stated that the commercial gain figure was highly dependent on that model.
   • NGA for all

     January 31, 2017 at 3:11 pm

     Steve – 50%! Where is there a reference to BT paying 50% of the capital in an intervention area? Oxera and NAO hoped for 1/3.
   • AndyH

     January 31, 2017 at 4:17 pm

     That was a hypothetical example – as Steve states, actual numbers will not be published…
   • MikeW

     February 2, 2017 at 3:39 am

     @Steve
     This looks like one of the counties taking BT up on its “early gainshare offer”.

     That means BT are willing to return clawback as though 33% had been reached, to return 100% of the money. The clawback is calculated from the original 20% assumption. All those aspects of the offer are based on provided it is re-spent with BT, and they make the actual 25% irrelevant.

     If they weren’t using the “early” offer, then the clawback would be calculated after 3 years, then every 2nd year. The council would be given only 50% of the accumulated clawback.

     Why is GM only 25%? IIRC, this was one of the last projects to get started.
2. NGA for all

   January 31, 2017 at 5:00 pm

   Andy H – the capital contribution % is referenced in the Oxera report, and the NAO published the £358m phase 1, and we know phase 1 is 4.1m premises, so it is not difficult. Most of this urban spend will have to be returned given the hundreds of urban cabs serving less than 200 premises installed in 2010-2013 with no subsidy. The gap funding actually needed for this must be really low or non existent.
   It reinforces the need for a plan for more FTTP transition work in rural.
   I hope you treating this urban spend like a loan to do the bits ignored.
   • MikeW

     February 2, 2017 at 3:58 am

     @NFA
     “The gap funding actually needed for this must be really low or non existent.”

     I guess we know that, right?

     The original project here was £13m, which is roughly half the amount of the first phase in North Yorkshire. Yet it ends up with a similar number of cabs – 590 here vs 660 in North Yorkshire. That’s considerably less per cabinet.

     The phase 1 project in North Yorkshire only took coverage up to around the 85-88th percentile (I don’t recall off the top of my head), so there are plenty more expensive-to-cover properties left there – lots more subsidy to go. Yet in GM, the phase 1 project has taken coverage to around the 98th percentile. Phase 2 will take it well beyond 99%.

     You can safely say that there’s relatively little subsidy going into coverage here, compared with other places.
   • NGA for all

     February 2, 2017 at 1:49 pm

     @MikeW you miss the point. No subsidy is needed, if it is half the cost and BT pays what it is supposed too, then why would subsidy be needed?
     It needs to be treated as a loan, and this needs to be reflected in the scale of the Capital Deferral.
     If there was no subsidy paid, there would be no need for clawback, and state aid receipts would be much lower. I wish it was otherwise.
   • MikeW

     February 2, 2017 at 4:56 pm

     I agree that, where takeup exceeds the threshold (whatever threshold has been agreed), then the clawback effectively turns a portion of the money (the clawed-back portion) into a loan.

     And I agree that, when assigning cash in the BT’s accounts, money that has been received as grant, but is now going to be handed back as a clawback, needs (a) to be moved into a “deferred” total and (b) replaced by BT-funded capex. On top, or course, of the capex that BT are employing in the first place.

     That’s the whole point of a gap-funded endeavour. It is deliberately designed that way. Why complain?

     But that doesn’t mean that /no/ subsidy is needed. The adjustments will mean that a few of the easiest/least-subsidised cabinets will have required no subsidy, but that won’t be true for all 590. At a very rough estimate, it might mean that 60-100 cabinets became subsidy-free, with 490-530 cabinets still subsidised.

     ‘Half’ was a purely hypothetical talking point from Steve. I’m not trying to extend the hypothesis. Using a clawback sum that amounts to 10% of the total subsidy gives us a better idea of scale.

     If there’s a point I’m missing then it relates purely to your beliefs that (a) there should be no subsidy. None. Zilch. Nada. Ever. and (b) BT aren’t making a capex contribution. I’m not missing those points. I disagree with you fundamentally on them. But I’m sick of raising that issue with you.

     You might mean that I’m missing the point about BT choosing, instead, to spend the money on rural FTTP too. I’m not missing that point, but, again, I think you have things wrong there; little of that is for BT to /choose/. But I can’t keep responding to those things either.

     Its probably best to assume that, for the most part, I’m trying to restrict myself to new comments.
3. Chronis

   April 5, 2017 at 5:15 pm

   DO you know when Castlefield will benefit from fiber broadband? around the Slate Wharf
   • Chris

     May 13, 2017 at 8:32 pm

     I heard that due to the fact that Castlefield is in some shape or form a heritage site, that OpenReach had / have issues upgrading the cabinets in Castlefield, specifically cabinet P91 (which I think is near to The Knott).

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