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Scotland Pick BT for Part of £600m Superfast Broadband Rollout

Thursday, October 10th, 2019 (1:16 pm) - Score 4,667
scotland r100 broadband lots map uk

The Scottish Government today announced that BT is their ONLY bidder for two of the three areas under the new £600m R100 (Reaching 100%) project, which originally (here) aspired to make “superfast broadband” (30Mbps+) ISP networks available to “every single premise in Scotland” by the end of 2021 (March 2022 financial).

The new scheme is intended to follow-on from the original £442m Digital Scotland (DSSB) project with BT (Openreach), which has so far reached an additional 940,000 premises via a mix of Fibre-to-the-Cabinet (FTTC / VDSL2) and a little ultrafast Fibre-to-the-Premises (FTTP) technology (the rollout is on-going into early 2020). As a result of this public and private investment nearly 95% of premises in the country are now within reach of a 24Mbps+ capable network.

Obviously this still leaves a sizeable chunk of rural communities to suffer slower speeds and so the SG decided in 2017 to establish the R100 programme. According to the original procurement document, this new contract was divided into three regional LOTS and some 178,948 premises were identified as eligible for intervention (“white premises“) or deemed to be in-scope of the plan (the figures below will have changed a bit since 2017).

We should caveat that, despite all of the SG’s early talk about aiming to reach “every single premise“, the official procurement document only committed its “gap funded intervention to deliver access to NGA Broadband Infrastructure [30Mbps+] to as many premises as possible by the end of 2021.”

NOTE: The city centres of Aberdeen, Edinburgh and Glasgow were excluded as they aren’t eligible for state funding (i.e. it’s difficult to demonstrate market failure in dense / lucrative urban areas), which is normal.

Lot 1 – the North lot

The North Area is broadly the Highlands and Islands, Angus, Aberdeen and Dundee (more particularly described and shown coloured green on the plan forming Annex 1 of the Initial Descriptive Document) and comprises approximately 99,288 White Premises. Estimated value excluding VAT: £384m.

Lot 2 – the Central lot

The Central Area is broadly central Scotland and Fife (more particularly described and shown coloured amber on the plan forming Annex 1 of the Initial Descriptive Document) and comprises approximately 53,570 White Premises. Estimated value excluding VAT: £83m.

Lot 3 – the South lot

he South Area is broadly the Scottish Borders and Dumfries and Galloway (more particularly described and shown coloured purple on the plan forming Annex 1 of the Initial Descriptive Document) and comprises approximately 26,090 White Premises. Estimated value excluding VAT: £133m.

The procurement exercise initially appeared to attract interest from several potential suppliers including BT, Gigaclear, Axione and SSE Telecoms, although this has been marred somewhat by disputes between some of those players and perhaps also Gigaclear’s recent problems (significant delays and strained resources) in England.

Meanwhile Axione doesn’t have much of an established presence in the UK and SSE Telecoms have tended to focus more on the enterprise side of the market. As such nobody will be surprised to learn today that BT (Openreach) looks set to secure both LOT 2 (central) and LOT 3 (south), not least because the SG said that they were the “only bidder” for both areas (very few other operators have the scale in Scotland to deliver it).

Sadly the SG says that further details will not be released until the contracts are signed “later this year” and there’s currently no word on when the preferred bidder for LOT 1 (north) will be unveiled. However it is noted that “more than one bid” was received for this LOT.

Paul Wheelhouse, Scotland’s Minister for Connectivity, said:

“Our £600 million R100 programme is a vital investment in Scotland’s infrastructure, given that the UK-wide telecommunications market has failed to deliver coverage to large areas of Scotland. Our commitment is despite regulation and legislation for telecommunications being reserved matters that are the responsibility of UK Ministers and this commitment is unmatched anywhere else in the UK.

It will help to deliver a future-proofed superfast broadband network, making Scotland one of the best connected places anywhere in Europe.

I am pleased that good progress on tender evaluation has been made and look forward to the process being completed, and contracts signed by the end of the year. More than one bid was received for the North and an announcement of the preferred bidder will be made in due course.

The Scottish Government has committed £579 million, or 96.5%, to the total cost of the programme, even though broadband is a UK Government responsibility. The UK Government will contribute just £21 million, or 3.5%, despite the Commons Scottish Affairs Select Committee suggesting UK Ministers should contribute more.”

As we’ve said before, the delays to this procurement means that the original completion time-scale may now be impossible to achieve, although much will depend upon how flexible the Scottish Government choose to be with their technology mix. Remember, the goal above is “superfast” NOT “gigabit” capable broadband ISP coverage, although the SG have long talked about focusing upon “full fibre” (FTTP) in their contract.

Due to the above, as well as the recent outcome of a similar contract in Wales (here), we feel it’s always wise to manage expectations a bit and warn that the detail of the contract could end up being weaker than hoped. Equally they might extend the time-scale and focus entirely upon FTTP, which may be a better approach.

Last year’s report from Audit Scotland (here) similarly doubted whether the SG could actually deliver on their R100 pledge. Admittedly there’s often a big gap between politically set targets and what can actually be delivered, which is something that often only becomes apparent after contracts have been signed.

Andrew Hepburn, Major Programmes Director for Openreach (Scotland), said:

“We’re proud of our strong track record in rural Scotland and delighted to be working with the Scottish Government on the Central and South lots of the Reaching 100% programme. Good connectivity changes lives. We look forward to signing contracts in due course, subject to due diligence and further governance.”

At this point it’s worth reminding readers that the SG’s Rural Economy Secretary, Fergus Ewing (MSP), has pledged to quit if he fails to deliver on the new £600m R100 project (here). “If I don’t deliver this by 2021, I think it will be time for Fergus Ewing to depart and do something else, and leave the job to somebody else,” said Fergus. Awkward.

Equally the responsibility for improving broadband in Scotland is actually reserved to Westminster, although like many other UK local authorities the Scottish Government has chosen to commit its own public funding to the effort (only about £21m will come from the UK via BDUK). On the other hand it’s entirely possible that they may yet boost from the UK plan to spend £5bn on the final 20% of premises (here).

NOTE: The procurement will not target premises that are already achieving speeds of 24Mbps+ as these are likely to see an uplift above 30Mbps as a result of future upgrades / changes. The difference between coverage at 24Mbps and 30Mbps is very small (c.0.3%).

UPDATE 2:11pm

Openreach has provided us with a comment, which we’ve added above.

UPDATE 11th October 2019

We’ve been reminded of a piece of detail that could make the LOT 1 contract harder to agree. Last year’s audit report noted that R100’s aim is to encourage greater use of “full fibre” (FTTP) broadband technology and as part of that it specified 11 9 mandated areas, all in the North lot, where 25% of premises must be able to get speeds of at least 100Mbps (on a Gigabit-capable connection).

UPDATE 14th October 2019

A small tweak to the number of mandated areas mentioned directly above, which judging by this seems to be 9 instead of 11 areas.

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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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16 Responses
  1. Avatar Matthew

    Before I finished article I was expecting to read central was lot with two bidders surprised its the highlands area that has multiple bidders.

    • Me too, I wasn’t expecting that. However it makes me wonder whether they’re going to adopt a wider set of technologies for the highlands areas, perhaps more so than the other two lots.

    • Avatar Matthew

      Ah okay so a mix of say FTTP from BT and then Airband Fixed Wireless or Even BT 4G.

    • Avatar Jonathan

      I would have said the same. However thinking about the area that the central lot covers (it’s my neck of the woods so to speak) what is left is going to be really really bitty with the odd property and handful of properties scattered all over the area of the lot. Basically the vast majority of people in the central lot are covered by VDSL from either commercial rollout or BDUK. Consequently it is likely to be unattractive to most bidders, but due to there existing wide coverage it’s adding stuff on existing networks for Openreach so much more doable. I would hazard that the southern lot is not that dissimilar either. This being reflected in the value of the lots. On the other hand there is a much bigger pot of money for the northern lot, and I would guess much of it is deep rural (it’s the highlands) and largely unsuitable for fixed wireless or 4/5G as well due to the topography of the land. Significant areas are completely unsuitable for existing satellite too, due to limited view of the southern sky as a consequence of the topography.

    • Avatar NGA for all

      Jonathan, hopefully it will be extending fibre to create FTTP clusters. That was the original plan and the original promise. It is happening elsewhere. Scotland for some reason is behind the others in terms of fibre in-fill.

    • Avatar craski

      @NGA
      I really hope it is for FTTP clusters. It would be a bitter pill having waited 10 years to then be dragged over the line at the very edge of the copper network on an FTTC infill cabinet. Those on the edge have waited long enough, I really hope R100 do it once and do it properly!

    • Avatar NGA for all

      @Craski I share your sentiment but the funds are there. I was disappointed with Audit Scotlands third effort. Paid BT contribution became ‘expected’ when questioned, so the programme costs and capital are still being gamed seven years in.

      The employment BT announced in 2016-17 could have started in 2012 if a different group of managers were in charge.

  2. Avatar Brian

    The wait for actual detail of who is actually get the long promised improvements continues.

  3. Avatar NGA for all

    Good to see.

  4. Avatar Oggy

    No bids from Chris Conder and B4RN here?

    We know how much she hates Superfarce so surely her guys would be right in here?

    • Avatar A_Builder

      I’m sure B4RN would be happy to help others build out or at least explain how to do so.

      Have you got a spare volunteer army and some machinery hanging about?

  5. Avatar JmJohnson

    I have a question… what speed measured is “superfast”… the speed you sync at or the hand back speed ?

    • Avatar John

      Handback will be irrelevant. It’s a worst case scenario figure.

      Those who sync at or just about the SuperFast figure often get covered by upgrades.
      If you sync a fair bit above you are likely deemed as “passed” already.

      Every deployment is different and different patterns happen.

    • Avatar JmJohnson

      I disagree John…
      ISP’s are using the handback as the lowest speed your line can go to before they acknowledge it as a fault (unless you get escalated past the 1st line support and give them technical/historic evidence).
      The difference between estimated sync and handback for my line is about 20Mb as an example (last year my handback value decreased 4Mbps… no idea why) so one could be syncing fine one day, have an issue and then be stuck above the handback but below the “superfast” speed.
      Hence my question… is superfast the sync rate or the handback… it should be the handback as ISPs are using that before they pass it as a fault to OR.

  6. Avatar Max

    If let’s say I am on VDSL2 and my max theoretical speed is 30Mbps but I sync at 24Mbps, do you think R100 would sort me out a better, FTTP connection?

    • Avatar Scott

      To note that the procurement did not cover prems that already had 24mbps but less than 30. All prems had to be less than 24mbps to qualify and also some key city areas were excluded from state aid cover. Don’t think you can guarantee FTTP also? Don’t think that was the ask of bidders really.

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