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Q3 2017 – UK Gov Extend Superfast Broadband to 4.65 Million Premises

Tuesday, November 28th, 2017 (11:36 am) - Score 1,089
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The £1.6bn+ state aid supported Broadband Delivery UK project has published its latest progress update to September 2017, which confirms that it has so far helped 4,651,700 extra premises across the United Kingdom to be covered by a fixed “superfast broadband” (24Mbps+) network.

Today it’s estimated that approximately 94%+ of premises in the United Kingdom can access a fixed line superfast broadband connection and the Government’s goal is to cover 95% by the end of 2017, before potentially rising to around 98% by around 2020. Meanwhile the final 2% seems likely to be tackled via a mix of alternative network providers (altnets) and the forthcoming 10Mbps Universal Service Obligation (USO).

So far most of the BDUK linked roll-outs have been supported by Openreach’s (BT) ‘up to’ 80Mbps Fibre-to-the-Cabinet (FTTC) and a small bit of their ultrafast Fibre-to-the-Premise (FTTP) technology. More recently we’ve also seen altnets like Gigaclear, Call Flow, UKB Networks and Airband win a number of contracts, particularly around the more remote rural premises where Openreach tends to struggle.

Q3 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 BDUK linked investment (i.e. it excludes those that have benefited but which only receive sub-24Mbps speeds). Similarly the data excludes “overspill effects” of BDUK-supported projects on premises which already have superfast broadband.

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.

bduk broadband performance update q3 2017

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 September 2017 has been estimated as £597,943,768 and that equates to 7,779 premises covered per £million of BDUK expenditure (expenditure is higher for this because the work has been delivered in advance of payment).

The roll-out pace has slowed over the past year but that is not a surprise because the programme is now focusing on the most challenging rural and some tedious sub-urban locations (e.g. Exchange Only Lines), which take longer to reach, cost more and deliver fewer premises passed in the same space of time.

There’s also a question mark over the impact of clawback (gainshare) on the figures, which forces BT to return some of their public investment when take-up goes beyond the 20% mark in related areas. So far up to £477 million could potentially be returned (BT results), which can then be reinvested into further broadband improvements. Most of this may be used to bridge the gap between 95% and 98% coverage by 2020.

NOTE 1: 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 were slow to do the same.

NOTE 2: The above expenditure figures exclude support for Connection Vouchers, the Mobile Infrastructure Project, the Rural Communities Broadband Fund, the Market Test Pilots, DCMS administrative expenditure and the new “Full Fibre” programmes.

NOTE 3: As we reported in October 2017 (here), BDUK supported projects have overbuilt some of Virgin Media’s network to the tune of around 1 million premises, although such premises are not eligible for public funding and so haven’t been included into the above total.

NOTE 4: The commercial market (i.e. purely private investment) has already enabled operators, such as BT and Virgin Media, to extend the reach of superfast broadband to around 75% of UK premises. However the major operators’ tend to view many of those in the final 25% as being “not commercially viable,” hence the reason for BDUK being setup to boost the roll-out via public investment.

bduk impact may 2017

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Mark Jackson
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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13 Responses
  1. Avatar CarlT

    Uh-oh. It’s BDUK story time.

    This comments section is likely to induce substance abuse…

  2. Avatar Steve Jones

    One point is not that £477m might be returned to the local BDUK projects. It’s a recognition by the BT accountants that much will be returned (and, even then, I’m sure it’s going to be an underestimate). As such, it’s on the books as a liability.

    The one thing that we don’t know is how much of that will be reinvested by the local BDUK projects and if any of the local authorities are actually going to just collect the cash at the end of the contracts and use it for general expenditure. It’s no secret that local authority budgets are stretched.

    It’s also worth noting that some of that £477m liability is already committed as many local projects have already signed extension contracts.

    Realistically, we might expect 97-98% SF coverage with a much higher proportion of FTTP. Some extension contracts have been well over the £2k per premises passed mark.

    • Avatar NGA for all

      £130m (of the £477m) has been made available for phases 3+, why not the rest? There is nothing in the new state aid measure limiting the re-use of clawback. Why not get a plan in place for these funds rather than mess about with an ill thought through B-USO offer? Why was it not planned in the first place?

      Only half of these funds and half of the funds in the Investment Account (a function of the £360-£400m required BT capital contribution) balances belong to LA’s, the rest is HMT, who just wish BT to fix the network as intended. As you can see more money is not the issue as long as BT Group do not try to shake the Government down. LFFN is a £190m up BT’s nose annoyance fund. It will be a crying shame if monies intended for rural networking are returned as BT failed to scale up for the required FTTP in-fill or sit on funds afraid Gigaclear will compete for them.

      Do have a gin, all shareholders will need one when it is understood BT’s current plan is to sit on nearly 3 tears worth of rural engineering costs.

    • Avatar Steve Jones

      @NGA

      It’s all available. I repeat. It’s all available. That’s what the accelerated gainshare process was all about. Now go lobby the local BDUK projects and the relevant local authorities as what happens to it is all in their hands.

    • Avatar NGA for all

      Steve, Fantastic, where do I find that BT offer? LA’s/DA know nothing and point to BDUK. BDUK point to a procurement process. It is stuck. BT and BDUK failed to provide EFRA an answer last April. HC 428 Wednesday 29 March 2017 Ordered by the House of Commons to be published on Wednesday 29 March 2017 – see q427 -and its answer in q429 Kim Mears added nothing Kim Mears: It is exactly the same. There is £129 million, which has been offered early as part of the gain-share. We are working through that with the local bodies in respect of further coverage.
      If it is stuck then a way can be found to force it, so any assistance would be appreciated.

    • Avatar Steve Jones

      @NGA

      Perhaps they ought to speak to other BDUK local projects then. Gloucester seems to know how accelerated gainshare works.

      “South Gloucestershire Council has successfully secured a further £4.39 million of funding through BDUK, the West of England Local Enterprise Partnership and accelerated gainshare (based on take-up from our Phase 1 contract with BT) to further extend broadband coverage to even more communities across South Gloucestershire.”

      http://www.southglos.gov.uk/community-and-living/broadband/broadband-rollout/update-councils-4-39-million-investment/

      Local BDUK projects ought to be in discussion with OR about these matters. No doubt there are individual timing issues as not all projects started at the same time and, possibly, they want to wait to see what the fuller picture will be as there are things like savings and the actual takeup rate will vary and might make more money available. However, accelerated gainshare was what OR put in place to release some money early based on a higher assumption on that takeup rate.

      I should also add that it’s quite possible local authorities might be holding on for this wider picture, and there may be local funding issues for any “match funding” if central BDUK money is being used as well. Then there is a timing issue of when any new contract phase can be signed as there is OR will have a limit on the capacity for putting things on the ground. The later stages are more labour and planning intensive as locations become more remote.

      In any event, the local BDUK projects (and their political masters) are the ones who negotiate that.

    • Avatar NGA for all

      The accelerated gainshare is from the £129m, that what it is called. Some might be tempted to borrow against the £477m but it remains outstanding.

      Unless you have something better. This money is yet to come into play and is currently stuck.

    • Avatar Gadget

      IMHO the use of the phrase “stuck” implies a hold-up to something that should be happening as a matter of course, and is perceived by many as a veiled criticism.

      Unless there is real evidence to the contrary the money is exactly where it should be ACCORDING TO THE CONTRACT, whilst many have agreed a way to release it early, some have not.

    • Avatar NGA for all

      Gadget, tying money funds down until 2023 could only occur if it was assumed their was going to be no money to return. Circumstances change and if there is an accelerated release of £129m, then the remainder can also be made available to plan and reach the original goal.

  3. Avatar MikeW

    @Mark
    You mention the slowdown in relation to the EO lines, but I think we’re seeing an extra slowdown because the easy EO lines have been largely done, and we’re now moving on to infill of long lines. The copper re-arrangement for those, and the resulting live-live migrations seems to be even more tedious!

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