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BT to Scoop LOT 1 of Scotland’s R100 Superfast Broadband Rollout

Thursday, November 21st, 2019 (4:49 pm) - Score 7,825

The Scottish Government has awarded BT (Openreach) the final LOT 1 contract – as preferred bidder – to deliver their new £600m R100 (Reaching 100%) project, which originally (here) aspired to make “superfast broadband” (30Mbps+) ISP networks available to “every single premises in Scotland” by the end of 2021.

As a quick recap, the R100 project was established as a follow-on contract to help upgrade around 180,000 premises that were still stuck on slower broadband services as a result of being missed by the original £442m Digital Scotland (DSSB) project with BT (Openreach). Overall this represents around 5% of homes and businesses in Scotland who cannot yet order a network capable of 30Mbps+.

Back in October 2019 it was announced that BT had won the contracts for both LOT 2 (Central Scotland) and LOT 3 (South Scotland), which was due in no small part to them being the only bidder (here). By comparison the award of LOT 1 (Northern Scotland) has taken longer, partly because several suppliers were involved in the bidding (BT, Axione UK and Gigaclear) and additional requirements were attached

R100’s overall aim is to encourage greater use of “full fibre” (FTTP) broadband technology where possible and as part of that it specified 9 mandated areas for LOT 1 where 25% of premises must be able to get speeds of at least 100Mbps (on a Gigabit-capable connection).

NOTE: LOT 1 is also the biggest / hardest one (valued c.£384m) and reflects about 100,000 premises in the Highlands and Islands, Angus, Aberdeen and Dundee.

We received some indications today from our sources that BT might have secured the LOT 1 contract (preferred bidder status) and upon enquiring a spokesperson for their network access division, Openreach, was able to confirm this. At present a formal press release has not been issued but we expect one to follow.

Andrew Hepburn, Openreach’s Major Programmes Director for Scotland, told ISPreview.co.uk:

“We’re delighted to be named preferred bidder for the North of Scotland. We’re proud of our record over the last six years and wanted to finish the job. We look forward to signing contracts for all three lots, subject to due diligence and further governance, and getting on with the vital job of bringing fast, reliable broadband to the people of Scotland.”

At present we don’t yet have are any details about the technology mix, coverage expectations or completion time-scale for any of these contracts. We should also caveat that, despite all of the devolved Government’s earlier talk about aiming to reach “every single premises“, the official procurement document only committed its “gap funded intervention to deliver [30Mbps+] … to as many premises as possible by the end of 2021.”

The delays in awarding this contract mean that 2021 is almost certain to be missed (either that or it will be a smaller / weaker rollout than hoped). In keeping with this we note that a similar contract award in Wales resulted in a much smaller deployment than planned (here), not least due to the difficulty of trying to attract BT – or any other suppliers for that matter – to deliver into such challenging areas without a much bigger subsidy.

On the other hand Scotland’s budget of £600m was significantly larger and may be able to bridge that gap better than Wales could, although we won’t know for sure until the details have been published in the near future. A big question mark also exists over how this will be balanced against the UK Government’s proposal to invest £5bn to ensure that every home can access a “gigabit-capable” broadband service by the end of 2025 (here); this of course depends upon the outcome of the 2019 General Election.

Lest we forget that the Scottish Government’s Rural Economy Secretary, Fergus Ewing (MSP), previously pledged to quit if he failed 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,” said Fergus. Awkward.

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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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20 Responses
  1. Avatar Matthew

    Shame but i suppose is to be expected

  2. Avatar craski

    All the early R100 talk was for more FTTP but as time rolls on this feels like just the next phase FTTC infill cabs.

    • I’d be surprised if we saw a lot of FTTC in this contract (nobody is approving major new contracts for that). I predict it’ll almost certainly be FTTP dominated but the big question is on how many premises will benefit and the deployment time-scale.

    • Avatar NGA for all

      Craski – the LOT 1 budget per premise is c£3,800 per premise, while LOT3 is £5k per premise. You hope there is freedom to move money between lots, including LOT2. Thus is before the BT contribution.
      There should be able to do a great deal of full fibre, the human resource issue will be a challenge.
      I think the Scots should also prepare a top up request from funds being returned to BDUK, and press Audit Scotland to re-do their third audit which failed to provide a report on who contributed what. BT paid became ‘expected’ when challenged.
      The lack of FTTP in-fill so far is noticable 21,000 – tiny compared to Wales and now Northern Ireland, so there must be a big transfer of funds into this next phase. Good progress but much to fight for.

    • Avatar TheFacts

      @NGA – who will do this ‘fighting’?

    • Avatar NGA for all

      The Facts, local MP’s, MSP local councillors and the public are all doing their bit. This is not to question the effort by most in Openreach and its supply chain, but the BT Group demands on investment in sport, payments for spectrum, pensions, etc create an environment where everything is gamed, and in this case the BT Group denials in 2013-2016 had all to be unpicked, and the unpicking so far has been very successful.

      Folk now becoming less afraid about discussing and achieving 98%+ coverage.

      I hope you agree it was disappointing the third Audit Scotland report failed to provide an adequate picture of who had paid what. It needs re-doing at some point.

    • Avatar Brian

      I took it as Lot 3 had higher levels per premise as a good proportion of what has been left out so far are single premises, as most villages and hamlets have been given FTTC. I know to connect ourselves would be we in excess of £5k using normal BT pricing.

    • Avatar NGA for all

      Brian, Craski, BT CEO was quoting £4k a property for rural and this was £2k capex and £2k capitalisated opex over 10-11 years, so these budgets to bill against will do most of it. I guess there will need to some rule where 4G/5G kicks in and I not sure what that is. Transparency on BT’s direct contributions are needed and remain outstanding after 7 years.

    • Avatar Gadget

      @NGA I assume the source of your £4k/premise is here https://www.ispreview.co.uk/index.php/2019/08/openreach-fttp-final-10-of-uk-likely-to-cost-4000-per-premises.html. Please note that is the average for the whole of the UK, and as is the nature of averages some will cost more and some will cost less. Taking that into consideration it is not reasonable to argue that somewhere like the Highlands and Islands of Scotland would lay anywhere near the whole UK average cost.

    • Avatar NGA for all

      Gadget, I was not suggesting that, only the need to possibly move budgets between lots. We should highlight the good news is that BT experience for urban is closer to £300 a premise.

      We should not repeat the misleading farce that cabinets were £100k each or indeed £50k each. That led to a very bad place for BT and it was entirely self-inflicted. It cannot be in BT’s interest to repeat the error.

    • Avatar The Facts

      @NGA – we have moved on from the £100k cabinet, are you saying the average cost in Scotland will be £4k/premise?

    • Avatar NGA for all

      Facts, Gadget – £4k x30m lines =£120bn – a bit silly, so the overall average for UK will be much less than £1,000 on average.

      For Lot1 you need a bit enough budget to bill against and keep the work going organising the resource in an efficient way as possible. As long as the cost tracking is in place and the gap funding process is proven to work then a reasonable outcome should be possible.

      The £100k cab was a lie, much repeated.

    • Avatar Andrew Ferguson

      Wrong again on the 4k times 30 million, but suspect you knew that and was trying to just cause a reaction.

      As with averages there are always outliers and I think sometimes you’ve latched onto a statement where someone referred to an edge case.

      Anyway your cost concerns may be mute in a couple of weeks, as the deep pockets of Facebook will be paying and no gain share clause to worry about

    • Avatar Gadget

      NGA – the quoted article suggests average of 4k for the last 10% of the UK only. Pareto works both in the lower 90% and in the last couple of %. In fact “80/20” Pareto would see the last 8% averaging £1000/prem and the final 2% at £16,000/prem average. Not that reality would work like than but be a continuous spectrum. Meanwhile in the real world Scotland has the highest number of inhabited islands in the UK so you might expect a good proportion of Andrew’s outlying connections to be found there driven by the likes of submarine cables and the above mentioned 100Mbps mandated areas.

    • Avatar NGA for all

      Gadget, I was answering the question you and Facts posed. The submarines cables have been paid for, all the handover points are in place and there are 5,000 fibre paths established out to the cabinets, so yes extending these or using spare tubing from an AGN will have some impact on the costs.

      In that sense the budgets look generous, and it will be interesting to get a sense of the pace at which the work can be conducted and at what point the switch to 4G/5G occurs. Hopefully BT will contribute the £300-£400 being invested in urban and this will be reported upon.

  3. Avatar Max

    I’m in the Highlands in Scotland, I currently get a downstream rate of 23Mbps and my max line rate is 27Mbps. Technically, this should be upgraded as a result of this project right?

    • Avatar NGA for all

      If your being picky, yes if you have neighbours further out, then the planners will be attempting to find an efficient way to locate splitters/or connection blocks so the final drops can be planned.

      If you have poles then you have a good chance.

      No poles, then you may need to get your neighbours together and help the process by aggregating demand or potentially laying duct on private land if that is what it takes.

    • Avatar ProxyServer

      Because of what you get currently maybe not. As the rollout will be based from expected speeds as they cannot take line conditions into account when estimating speeds for an area. They would estimate it would be a good line condition and copper cables.

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