2018 Q3 BDUK Take-up Progress for UK Superfast Broadband Rollout

The Government’s £1.6bn+ Broadband Delivery UK project has just published its latest take-up data to the end of September 2018 for its state aid supported roll-out of “superfast broadband” (24Mbps+) services across the United Kingdom, which has so far extended coverage to 5,011,052 extra premises.

The figures reflect the percentage of premises (homes and businesses) that have chosen to sign-up with a superfast broadband network (delivered via FTTC, FTTP or Fixed Wireless), specifically those which have been covered via support from the publicly funded BDUK programme (i.e. % subscribed of premises passed).

At present this data largely reflects both the first two phases of the programme and some related phase 2 extension contracts (technically Phase 3). We also skipped the June 2018 (Q2) data update last year and so have added that in below.

BDUK Phases 1 (Finished Spring 2016)

Supported by £530m of public money via the Government (mostly extracted from a small slice of the BBC TV Licence fee), as well as significant match funding from local authorities and the EU. The public funding is then roughly matched by BT’s private investment. Overall it helped to extend “superfast broadband” (24Mbps+) services to cover 90% of homes and businesses in the United Kingdom.

BDUK Phase 2 (Technically on-going)

Supported by £250m of public money via the Government, as well as match funding from local authorities, Local Growth Deals and private investment from suppliers (e.g. BT, Gigaclear, Airband, Call Flow etc.). This phase extended superfast broadband services to 95% of premises in time for the end of 2017, although some extension contracts are on-going until c.2020 and will reach beyond 95%.

Phase One was broadly dominated by Openreach (BT) linked contracts, while the on-going Phase Two contracts have attracted a mix of extension deals alongside BT and several alternative network providers (Gigaclear, Airband, Call Flow etc.).

Crucially the BDUK contracts include a clawback (gainshare) clause, which requires the suppliers to return part of the public investment as customer adoption of the new service rises. The funding can then be reinvested to further improve coverage and speeds via future contracts. Efficiency savings from earlier phases can also be reinvested.

So far it looks as if a total of around £721m could in theory be returned via clawback from BT (Nov 2018 figure) and £210m from efficiency savings (Jan 2018 figure), which may rise again in 2019 (details here and here). BDUK has estimated that this reinvestment could be enough to boost the UK coverage of fixed line superfast broadband networks to around 98% by the end of 2020.

BDUK Phase One Take-up (Average %)

The following table breaks the take-up data down by each BDUK local authority (project area), although for the proper context these percentages should ideally be considered alongside the most recent premises passed (network coverage) data, which can be seen at the bottom of this article. Overall 52.4% of premises in this phase have adopted the new service (up from 47% in March 2018).

NOTE: Some of the counties have divided their deployments into separate contracts. For example, Phase One in Shropshire doesn’t include the ‘Telford and Wrekin‘ area because that is part of a separate Phase Two contract inside the same county. On top of that the contracts were all signed at different times and so are at different stages of development.

BDUK Phase Two Take-up (Average %)

So far in Phase 2 an overall total of 35.7% (up from 30.56% in March 2018) of premises have adopted the new service and some projects have yet to report. We note that a number of Phase 2 schemes also consist of more than one contract type and so you may see several figures being reported for certain areas in order to reflect each of those deals.

IMPORTANT: Take-up is a dynamically scaled measurement, which means that at certain stages of the scheme it may go up or even down depending upon the pace of deployment (i.e. premises passed in any given time-scale), although over time the take-up should only rise.

Explained another way, earlier phases of the roll-out were easier and faster to deploy, so you could expect to see a bit of a yo-yo movement with the take-up % sometimes falling if lots of new areas were suddenly covered. Some contracts are also younger than others and will thus take time to catch-up. On top of that BDUK’s roll-out pace has slowed to a crawl as it reaches remote rural areas, which will give take-up a chance to climb.

A number of other factors can also impact take-up, such as the higher prices for related “fibre” services, as well as customers being locked into long contracts with their existing ISP (they can’t upgrade immediately) and a lack of general awareness (locals don’t always know that the faster service exists) or interest in the new connectivity (if you have a decent ADSL2+ speed and only basic needs then you might feel less inclined to upgrade).

The fear of switching to a different ISP may also obstruct some services. In other cases the new service may run out of capacity (i.e. demand is higher than expected), which means that people who want to upgrade are prevented from doing so until Openreach resolves the problem, although the scale of this issue is fairly small.

Now, for some context, here’s the latest progress report on related contracts for the same period.

Funding and Premises Passed Progress (BDUK Phase 1 + 2)

The above figures only include 24Mbps+ capable premises in BDUK intervention areas.