Superfast Broadband for 25000 Extra Premises in the Scottish Highlands UPDATE

The Scottish Government has announced that 25,000 additional homes and businesses in Scotland’s rural Highlands and Islands will be able to access “superfast broadband” as part of a second round of extended coverage for the region, which is part of the state aid supported £428m Digital Scotland (DSSB) project.

As a quick recap the original DSSB contract, which was supplied by Openreach (BT) via their Fibre-to-the-Cabinet (FTTC / VDSL2) and a little Fibre-to-the-Premises (FTTP) technology, was actually split into two regional halves – ‘The Rest of Scotland‘ and ‘The Highlands and Islands‘.

A few months ago the Scottish Government announced that an estimated 95.5% of homes and businesses across Scotland were now able to order a “high speed fibre broadband” line as a result of this effort (here), which dropped to just 92.7% when considering those able to access “superfast broadband” speeds of 24Mbps+ (Thinkbroadband notes that the latest ‘superfast’ coverage figure is 93.5%).

Crucially the Highlands and Islands side of this contract has only delivered a much lower coverage figure, with around 80% able to order a “superfast” connection. In fairness this is because many of the related rural areas are both very remote and very sparse, which has made it particularly difficult to reach them within the limited budget (H&I’s overall public and private funding is around £146m of the £428m total).

Overall the project today claims to have “met the [original] contract’s target” to deliver superfast coverage to around 124,000 premises in the H&I region and they’ve now announced a new extension to reach another 25,000+ by 2019 (c.150,000 premises overall); we assume this means the ‘end of’ 2019.

A total of 7 new exchange areas, previously not reached within the budget, are expected to see some coverage (check http://www.hie.co.uk/fibre for more details).

The H&I Extension – 7 Exchange Areas
– Kilchenzie (Argyll and Bute)

– Kilninver (Argyll and Bute)

– Glendale (Highland)

– Torridon (Highland)

– Waternish (Highland)

– Machrie (North Ayrshire)

– Great Bernera (Outer Hebrides)

According to today’s announcement, the above means that “around 80 existing project areas across the region will see extended coverage and more local infrastructure to improve speeds.”

Meanwhile the Scottish Government has separately pledged £600m to bring “superfast broadband” (defined in the next contract as 30Mbps+) access to all premises by 2021 via their future Reaching 100% (R100) project (here and here), which is currently trying to pick from a selection of suppliers (e.g. BT, Gigaclear etc.) and could complete by the end of 2021 or March 2022 as a financial year.

Nicola Sturgeon, First Minister, said:

“This is excellent news for the Highlands – delivering access to superfast broadband to more than 250 Highlands and Islands communities for the first time.

The £146 million project has passed its original targets and is providing opportunities for businesses and communities across the region to transform the way they work.

We will build on this success and our Reaching 100% programme, backed by £600 million, will deliver superfast broadband access to every home and business in Scotland by the end of 2021 – the only part of the UK to do so.”

Charlotte Wright, Chief Executive of HIE, said:

“We’re delighted to see the project reaching even more homes and businesses. The project has seen more than 1,200km of fibre cable laid to create a core network, including 20 subsea routes to reach our island communities, and there are more than 900 new fibre cabinets delivering services to local homes and businesses.

This infrastructure makes it easier for broadband and mobile operators to deliver and grow services, opening up the many social and economic benefits of good regional connectivity.”

Just to put this work into some perspective, back in 2013 just 4% of the H&I region could access a “fibre” based broadband network (i.e. before the DSSB contract began) and today the release states that this has increased to 86% (note: this is lower than the “superfast” figure of c.80% above because they’re also including coverage from areas that receive slower than “superfast” speeds on FTTC etc.).

Overall the Highlands and Islands roll-out claims to have now passed 180,000 premises (230,000 premises when combined with existing commercial deployments for the region), which is higher than the 124,000 figure given earlier and thus we assume that the same sub-24Mbps coverage rule has been applied (i.e. 124,000 represents superfast and 180,000 adds in the sub-24Mbps areas on the new network too).

Sadly no information is given for how this latest extension is being funded but in the past the Scottish Government has suggested that some of it could stem from a reinvestment of existing public funding via gainshare (clawback) and / or efficiency savings (i.e. public investment returned by BT as take-up grows beyond 20% in related areas). We have asked and will update if more details are provided.

Going forwards it will be interesting to see whether or not the Scottish Government’s future R100 programme re-adjusts its focus more toward fostering FTTP instead of FTTC, particularly in light of the UK Government’s ambition to extend “full fibre” coverage to all by 2033 (here). On the other hand they may seek to maximise coverage of existing / cheaper technologies first, rather than leave some areas waiting 15 years for FTTP/H.

UPDATE 10th August 2018

We’ve had it confirmed that the additional coverage is as a result of gainshare (reinvestment due to clawback / high take-up) and efficiencies (savings) from the original contract, which is much as we expected.