£3m Reinvestment to Extend Openreach FTTP Over Highlands

The Highlands and Islands Enterprise (HIE) has announced that a reinvestment of £3m from BT will soon enable Openreach to build more “ultrafast broadband” capable Fibre-to-the-Premises (FTTP) ISP networks across the rural region of Scotland, although it’s unclear how many extra premises will benefit.

At present the associated £442m – public and private investment – Digital Scotland (DSSB) project has already helped to extend the availability of “fibre broadband” services (i.e. really a mix of slower hybrid fibre FTTC and a little ultrafast full fibre FTTP) to a total of 940,000 premises. The result is that almost 95% of Scotland now has the ability to order a “superfast broadband” speed of 24Mbps+.

The contract also includes a clawback (gainshare) clause, which essentially means that any take-up by local premises above 20% in the intervention area (i.e. consumer orders of the new service) should result in BT returning some of the public investment (Scotland is now seeing well over 50%). The returned funding can then be reinvested into a further boost of network coverage and faster speeds.

So far the programme for the Highlands and Islands region has produced a take-up of around 60% in the intervention area and as a result some £3 million is being returned early by BT (this can be done over the length of the 10 year contract). The funding is thus set to be reinvested in order to help Openreach extend their full fibre FTTP network until 2020. This is on top of a similar return worth £2.23m for the HIE region in 2015.

Paul Wheelhouse, Minister for Connectivity and the Islands, said:

“With our partners we have invested over £400 million in the Digital Scotland Superfast Broadband programme, taking fibre broadband to areas where the market would not otherwise go. Connectivity in the Highlands and Islands has been transformed by the Digital Scotland programme.

The region as a whole has seen a huge increase in the availability of faster fibre-based services, with thinkbroadband reporting an increase from 18.6% fibre broadband coverage in January 2014 to over 92% today. Access to fast and reliable broadband is also key in boosting our business and public sectors, helping to underpin economic growth and drive productivity.

Grimsay and Great Bernera in the Outer Hebrides recently became our first fully ultrafast capable islands. We’re now set to see similar coverage in other areas that have been challenging to reach, including Waternish and Glendale in Skye. I’m delighted that as a result of great take-up of services in the region even more people across the area will benefit from the full fibre network.”

Overall it’s stated that the DSSB project in HIE has helped to provide a new “fibre” network to cover more than 180,000 premises. In all the project is expected to reach 30,000 more highlands premises than the initial contract target (FTTC and FTTP).

Stuart Robertson, Openreach’s HIE Director of Digital, said:

“We’re delighted to have more funds to reach that little bit further. We placed our final project cabinet in Wester Ross last week, it will mean more coverage for the Dornie community. All of our remaining coverage now will be FTTP. It allows us to bring high speed services direct to the people in more scattered homes and not spots, who may currently face the poorest broadband speeds.”

The announcement doesn’t clarify, although we strongly suspect that this £3m is part of the £17.8m reinvestment that was confirmed by DSSB in August 2019 (here), which promised to reach an additional 6,000 premises (about £2.96K per premises – a huge level of subsidy). If that holds true then the £3m should reach around 1,000 extra premises.

Once the above programme completes then it will be followed by the new £600m R100 (Reaching 100%) project, which has so far assigned two of its three LOTS to BT (here). However the final LOT 1 (North) covers the HIE region and has yet to be awarded. On top of that we don’t yet know how many premises or what technologies will be used, although the decision to go with BT for LOT 2 and 3 suggests that FTTP will be the focus.

UPDATE 1:51pm

The HIE have informed us that their £3m is separate from the £17.8m mentioned a couple of months ago (i.e. the £17.8m was only for the ‘Rest of Scotland’ contract area).