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Welsh Government Take Flak Over Delay to New Broadband Contract

Wednesday, August 22nd, 2018 (1:32 pm) - Score 1,113
wales uk development

The Conservative AM for Montgomeryshire in Wales, Russell George, has criticised the Welsh Government’s lack of explanation over the delay in awarding contracts for their new “superfast broadband” (30Mbps+) roll-out project, which aims to reach 88,000 extra premises in poorly served areas and could be worth up to £200m.

At present almost 95% of homes and businesses across Wales are already estimated to be within reach of a superfast network, which is partly due to the original Superfast Cymru programme with Openreach (BT) that has worked to extend the reach of fibre-based FTTC and FTTP ISP technologies to 733,000 premises (here). This contract has now ended.

By comparison the new Phase 2 follow-on scheme, which was put out to tender at the very start of 2018 (here and here), aims to extend 30Mbps+ capable networks to “every property” in Wales (with a focus on FTTPfull fibre” connectivity). Originally the completion date for this phase was pegged as the end of 2020, which wasn’t particularly realistic and the WG has since stopped using it.

The potential value of this new project is up to £200m, although the first tender document only confirmed about £62.5m of that total and is initially targeting an expansion to around 88,000 additional homes and businesses. The investment will be split across three lots and these don’t necessarily have to be won by the same supplier.

Lot 1 — North West Wales (Estimated value: £14.858m)
Intervention Area of 21,125 NGA white premises has been identified with an additional 29820 premises potentially available pending further information.

Lot 2 — East Wales (Estimated value: £21.706m)
Intervention Area of 30,862 NGA white premises has been identified with an additional 21183 premises potentially available pending further information.

Lot 3 — South West Wales (Estimated value: £25.436m)
Intervention Area of 36,166 NGA white premises has been identified with an additional 17552 premises potentially available pending further information.

Back in May 2018 Julie James AM, Leader of the House and Chief Whip, issued an update on the progress of Phase 2 and pledged to “announce the successful bidders before the summer recess, with deployment work commencing as swiftly as possible after that.”

The summer recess has now begun and today a report by the BBC quotes Ms James as saying that their procurement process has been “complex with a number of unforeseen issues arising,” which she pledged to elaborate on in the coming weeks.

A Spokesperson for the Welsh Government said:

“While Superfast Cymru has successfully changed the digital landscape in Wales, we know there is more to do in reaching the remaining premises without access and we are now working on how to do this.

A tender process is under way for the successor scheme to Superfast Cymru, which will be underpinned by significant amounts of public funding, and further details will be provided in the autumn.

Work on the procurement exercise is complex and we will award contracts as quickly as the process allows. It is absolutely essential and right that time is taken on this so the full benefits from the successor scheme can be achieved.”

In fairness complex procurements like this often tend to take longer than expected and we’ve seen the same sort of delays in a large number of other broadband delivery contracts across the UK (what really matters is the end result). As such we tend not to get too worried unless the process drags on for several months past the target without a clear conclusion.

Equally with so much money on the table there’s always the prospect of a possible dispute between prospective suppliers, which is an issue that seems to currently be afflicting the Scottish Government’s similar £600m tender (here). However at the time of writing we’ve no evidence to suggest that the same type of dispute may be causing problems in Wales.

Instead we suspect that the challenge of maximising value vs coverage in such an inherently sparse and rural part of Wales, which will be expensive to reach with FTTP, could be making it difficult to get the finer details agreed with prospective suppliers. The problems that Openreach faced with their FTTP roll-out during Phase 1 (wayleave issues etc.), some of which have been left unfinished, helps to highlight that challenge.

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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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9 Responses
  1. Avatar withoutfibre

    Nothing really changes with the minister’s response, it’s the same line of we’re working as hard as we can. Doubt the minister is stuck with a slow broadband speed, I guess her exchange was first in the queue for an upgrade. Perhaps the ICT responsibility should be given back to Westminster to deal with as Labour AMs are more interested in their long summer recess and the impending Leadership contest.

    • Avatar chris conder

      indeed, and it will never change, it is all a superfarce throughout the country, not just Wales. A stop gap technology and clever marketing has fooled the politicians for a decade.

    • Avatar Matthew

      Seeing as the Pending Contract is meant to be focused on FTTP I hardly see that as a Stop Gap Technology. Yes FTTC and G.Fast which even BT have realised now. But still think FTTrN/FTTdp has potential in some areas like Flats and sparse rural areas.

  2. Avatar Meadmodj

    All parties have no doubt learnt lessons from the earlier phase. This is the usual party political swipe. The average cost per premise will be higher and whilst the strategy is FTTP it cannot be 100% (available funding) so the contract wording needs to be very tight. They should not be criticised for ensuring public subsidy is to be used appropriately.

    • Avatar olicuk

      And therein lies the problem… used appropriately. Two potential issues I believe may be present in my local area (which is not Wales):

      1) Recent contract has gone to Gigaclear, but it looks like Openreach are now starting to cover some of the same area despite presumably it not being in their commercial plans before. Competition and all that… . I know it’s also happening in Kent where Call Flow rolled out FTTC a couple of years ago. Now suddenly Openreach has turned up with FTTP.

      If the commercial bidders say it’s not in their plans now, they should be barred from overlaying within a significant period (10yrs?) after an award to a competitor. Or of course if they don’t like that, they have the option to say, hold on, we can do this commercially now… and have the area removed from state subsidy. But with that commercial build they must still commit to connect every property in a given area in a set timescale, with penalties.

      2) The numbers… why with a target of 100% is there such fluctuation in numbers. It’s not that difficult to count properties, use the Openreach database for one. If they want to compete they need to be open and honest with their data, and help the state to ensure subsidy only goes where it’s really needed. I’m currently investigating a case where good FTTC appears to have been overlayed with FTTP by a BDUK scheme, where the data being wrong is the most likely cause. We’ll see if that’s the case or not but certainly getting clear accurate data from all suppliers into a single accurate database seems challenging, and presumably is what’s affecting numbers.

    • Avatar Brian

      The issue with overlay is down to the commercially not viable case changing when there is competition and you start losing revenue.

    • Avatar olicuk

      Indeed but clever commercials can avoid that. And it’s not really in BDUKs interest to bring competition as the number of people taking the solution they funded will be lower that it otherwise would and gainshare will then be less… And so more public money will be needed to reach 100%.

      Then there are the costs to consumers of two networks being built out… obviously this investment needs to be paid for and its the consumers who foot the bill at the end of the day. Do we build two power networks to our homes or two sets of sewer pipes… no, it would be crazy. Likewise we don’t really need two or more competing fibre cables either… because they can, they do. Competing services, yes, but physical networks… why, when the costs and payback periods are so high, and technological advance so fast?

      We auction the airwaves, we auctioned off the utilities… why don’t we essentialy auction the market for fibre networks (where they currently don’t exist). Openreach and its competitors could bid for local government wards for want of a better split, for exclusive rights to install “open fibre” there, and be the sole infrastructure provider for 10 years before the market is opened again. Where there are no bids, the BDUK process can be used, but that also then excludes non bidders and losing bidders in the same way from later building networks.

      It’ll make the utilities think hard, and I would hope invest for their lives. Winners would be given say 2 years to implement, with severe penalties for failure.

      Service provision could benefit from a shakeup too… force infrastructure winners and the biggest ISPs to work together. So large ISPs with say more than 5 or 10% market share would need to make themselves available on all publically delivered networks (and those to new build sites too). So SkyBB over Gigaclear for example, ensuring everyone gets a good choice of service provider.

    • Avatar TheFacts

      @olicuk – bit late to make exclusive when code powers exist.

  3. Avatar James Blessing

    The “Openreach database for one” has been shown less than reliable as it gets updated a long time behind reality – there are countless cases where a cabinet has been excluded from the rollout plan because it’s still listed as having 10 properties connected to it when there’s been a housing estate with several hundred people built next to it.

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