BT and Axione Lock Horns Over Scotland’s R100 Broadband Plan

The Scottish Government’s future £600m R100 (Reaching 100%) superfast broadband rollout programme could be facing a problem after sources told ISPreview.co.uk that Axione, one of three remaining bidders for the contract, had allegedly set its lawyers on BT (Openreach) over claims of anti-competitive behaviour.

At the time of writing Openreach and Axione have both informed us that they wouldn’t be commenting, but equally they didn’t deny that such a situation had arisen. Meanwhile we caught the Scottish Government a little late on Friday and as such they’re still checking whether any guidance or background can be offered, but they too have a policy of not commenting when it comes to ongoing legal proceedings.

The R100 project was first formally unveiled at the end of 2017 and its aim is to go beyond the existing £428m Digital Scotland (DSSB) scheme with BT by aspiring to make “superfast broadband” (30Mbps+) ISP networks available to “every single premise in Scotland” by the end of 2021 (here and here); March 2022 as a financial year.

Several suppliers including BT, Gigaclear, Axione and SSE Enterprise Telecoms were originally known to be bidding to supply the new scheme, which currently states that there will be 178,948 premises eligible for intervention across three regional lots (i.e. more may be required to reach 100% coverage).

Few people in the UK will be familiar with Axione as they’re not a household name over this side of the channel (no real presence in the consumer market), but as a wholly-owned subsidiary of the French Bouygues Group they’ve been building a lot of Fibre-to-the-Home (FTTH/P) infrastructure across parts of France and a little in Ireland. FTTH is increasingly important given the UK’s new hope for universal coverage by 2033 (here).

Arguably the uncertain outcome of Brexit and Axione’s lack of a significant pre-existing presence in the United Kingdom – at least around consumer fixed line broadband infrastructure – will have made them more of an outside bet compared with BT and Gigaclear (the latter is only present in England). On the other hand Scotland’s contract is a significant and attractive prospect for such an operator, which will have fuelled serious interest.

In the meantime any kind of legal problems could threaten the Scottish Government’s hope of being able to sign their first supplier contracts in January or February 2019. We may be able to update this article further next week, although it’s proven to be particularly difficult to get hold of our usual contacts during the summer holiday period.

1. NAT

   August 18, 2018 at 8:03 pm

   Sounds like electric/gas all over again. Don’t like the idea of foreign powers taking over the broadband market as well. Most of the main power companies are owned by the French, Germans and Spanish. Now maybe British broadband infrastructure.
   • Jordan

     August 20, 2018 at 4:53 pm

     You say that but BT Group’s largest shareholder with 12% is Deutsche Telekom a German company.
2. Brian

   August 18, 2018 at 8:45 pm

   Just hoping it won’t delay things further, after years of broken promises, the R100 is the only active hope. Waiting to see which premises will actually be covered by it.
3. Matthew

   August 19, 2018 at 8:42 am

   Hope this doesn’t get too delayed R100 looks to be a very promising development for Scotland far more than the USO for that region of the U.K.. does make you wonder why Westminister can’t find money for rest of U.K.
   • Joe

     August 19, 2018 at 12:31 pm

     Per head Scotland has far more money to spend due to fiscal transfers from England.
   • Matthew

     August 19, 2018 at 6:50 pm

     Agreed but still sure if they really tried the money could be found it’s not that unthinkable surely.
   • Mark

     August 20, 2018 at 9:30 am

     @ Joe

     Do you mean aid, a loan or simply giving us money?

     I would also like to know what your meaning of fiscal transfer is?
   • Graycoll

     August 20, 2018 at 10:35 am

     @ Mark

     I think Joe is referring to the monies allocated under the Barnett Formula that is the mechanism for adjusting the expenditure needed for devolved services (which includes broadband rollout by the four nations of the UK). This can be worked out by spending by nation or more controversially spending per capita, which is frequently quoted as being higher in Scotland that in England.
   • Joe

     August 20, 2018 at 10:56 am

     @Mark As an example last yr Scotland spent ~11k/person and England ~9k. The different made by giving Scotland money (notionally from the UK budget but that in practice is England – As Ni/Wales also receive far more per head) The Amount given bares no relationship to the real differences. ie on any objective assessment Wales would get more and Scotland less.

     Yes England could spend more money but that either means more taxes or more borrowing. (I might argue that its good value spending but thats another issue) If the English spending was the same as Scotland then obviously the need for this would not exist.
   • Mark

     August 20, 2018 at 3:53 pm

     I knew exactly what he meant and it’s the way he meant it. Acting as if the money was simply being given out of Westminster’s pocket and not England’s pocket as the last time I checked we live in a United Kingdom governed by all for all and not just England.

     The Barnet formula is outaded but it is in no way as black and white as saying Scotland, Wales and Northern Ireland get much more than England. England has a much larger population and it’s increasing year on year whereas the other 3 are staying much and such the same. Historically up until recently Scotland raised more taxes than England per capita as well and let’s not mention the already bloated money pit that is HS2 and it’s massive price tag.

     The north of England has much more to grumble about with the way Westminster is spending tax payers money south of the country and especially in and around London.
4. Jim Weir

   August 19, 2018 at 2:29 pm

   Which of the 4 original bidders has dropped out? Either SSE Telecom or Gigaclear?
   • Mark Jackson

     August 20, 2018 at 6:56 am

     I think it was SSE but at the time of writing the above article I couldn’t find where I saw the most recent bidders list.
5. Ogilvie Jackson

   August 19, 2018 at 7:51 pm

   Oh no , more delays. This is the last thing rural Scotland needs.
   Hope the Scottish Government says ,IF YOUR GOING TO SQUABBLE , FORGET IT and give the contract to Gigaclear.
   Our remote communities are desperate for R100 news and need to know who is going to get what and when.
   Keep at them ISP REVIEWS until they give you an answer.
   • Steve Jones

     August 20, 2018 at 11:45 am

     Most likely legal action by one of the parties (and it would seem Axione are making the complaints) would impact on the whole process. The Scottish government would not simply be able to award the contract to Gigaclear out of frustration as the courts would have a say.

     Unfortunately, the story has no detail on the basis of any legal complaint by Axione save the anti-competitive action.

     I’d also suggest that legal action could be aimed at the procurement process itself if Axione felt that it was breaching competition issues.
6. Ian Moya

   August 21, 2018 at 8:09 pm

   I live in aberdeen city centre

   cab 71

   4 years i’ve been told coming soon

   still stuck on adsl2 😐

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