Q1 2017 – Gov Project Extends Superfast Broadband to 4.42 Million UK Premises

The latest Q1 2017 figures from the Government’s £1.6bn+ Broadband Delivery UK project has revealed that some 4,426,493 additional premises across the United Kingdom can now order a “superfast broadband” (24Mbps+) service as a result of their joint investment with local councils and the private sector.

At present around 92% of premises in the United Kingdom can access a fixed line superfast broadband connection and this should reach 95% by the end of 2017, before hopefully rising to around 97% in 2020. The remaining 3% are likely to be catered for by alternative networks (altnets) and the forthcoming 10Mbps Universal Service Obligation (USO).

Prior to BDUK the commercial market (i.e. purely private investment) had already enabled operators like BT and Virgin Media to expand the reach of superfast connectivity to around 70% of the UK. However the major operators’ tend to view many of those in the final 30% as being “not commercially viable” and so the BDUK programme was setup to boost the deployment via public investment.

So far most most of the deployment has been supported by Openreach’s (BT) ‘up to’ 80Mbps capable Fibre-to-the-Cabinet (FTTC) and some ultrafast Fibre-to-the-Premise (FTTP) technology, as well as some work from alternative network ISPs like Gigaclear, Call Flow and UKB Networks etc. We expect to see altnets taking a greater role when it comes to tackling the final 3-5% as these are areas where BT may struggle.

Q1 2017 Progress Report

The “premises passed” figure used below only reflects those homes and businesses (premises) able to access “superfast” speeds of 24Mbps+ as a result of help from the BDUK project (i.e. it excludes those that have also benefited but which only receive sub-24Mbps speeds). The data also excludes “overspill effects” of BDUK-supported projects on premises which already have superfast broadband available.

NOTE: The table only shows state aid from the Government’s project (BDUK) and does NOT include match-funding from local councils, the EU and other public or even private sources.

The headline figures used above are said to be 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 the end of March 2017 has been estimated as £582,211,960 and that equates to 7,603 premises covered per £million of BDUK expenditure (expenditure is higher for this because the work has been delivered in advance of payment).

Admittedly the roll-out pace has slowed somewhat since the early years, although this is to be expected because the programme is now concentrating on the most challenging rural and some tedious sub-urban locations (e.g. Exchange Only Lines). Related areas take longer to reach, often cost more and deliver fewer premises passed in the same space of time.

Likewise there’s a big question mark over the impact of clawback (gainshare) on the above figures, which forces BT to return some of their public investment when take-up goes beyond the 20% mark in related areas. So far around £446 million could potentially be returned, which can then be reinvested into further broadband improvements. However we might not get the full picture for awhile.

One final point to make is that future deployment phases, such as those aiming to deliver coverage above 95%, will be adopting the slightly improved 30Mbps+ definition for “superfast broadband“. The EU and Ofcom have been using this definition for many years, although official BDUK contracts have been slow to do the same.