Scotland Reveals BT Fibre Broadband Rollout for R100 LOT 1

After a long delay the Scottish Government (SG) and BT (Openreach) have finally signed a rollout contract for LOT 1 (North Scotland and the Highlands) of the £579 million Reaching 100% (R100) project, which will see “superfast broadband” speeds of 30Mbps+ reaching many more rural premises (mostly via gigabit FTTP).

Last year Scotland awarded two out of its three contracts under their R100 project – Central (LOT 2) and Southern (LOT 3) – to BT (Openreach). Meanwhile the decision to hand the LOT 1 deal to BT (here) ended up being stalled by a legal challenge from rival bidder Gigaclear (here).

Thankfully the legal disputes was finally resolved in August 2020 (almost a year later) after the provider agreed to a confidential settlement with the Scottish Government (here). The decision meant that the Government could move forward with signing the LOT 1 contract, which it needed to do before the end of 2020 in order to avoid another delay due to the end of existing state aid rules.

Just to recap. The LOT 2 contract aimed to upgrade at least 47,000 premises, while LOT 3 will do 26,000. The majority of Openreach’s build for those two LOTs are due to be completed by the end of 2023 (LOT 3 by summer 2024) and almost all of this is expected to be delivered using gigabit capable Fibre-to-the-Premises (FTTP) technology (see here and here).

LOT 1 Details

Meanwhile LOT 1 is the largest one and is valued at £384m. Under the procurement process this was said to reflect about 100,000 remote premises across the Highlands and Islands, Angus, Aberdeen and Dundee. The contract also specified 9 mandated areas where 25% of premises must be able to get speeds of at least 100Mbps (on a Gigabit-capable connection).

Sadly, the SG’s announcement doesn’t give us a lot of new detail (e.g. a final premises passed target) or say when LOT 1 is due to complete. Instead, we are told that 1Gbps capable Fibre-to-the-Premises (FTTP) technology will be “used for more than 80% of addresses of the North lot contract build” (no word on the plan for the other 20%).

The contract will also involve the laying of 16 new subsea fibre optic cables, which aims to ensure “future-proofed, resilient connections in all island local authorities,” although it doesn’t provide a list of those routes.

Paul Wheelhouse, SG Connectivity Minister, said:

“The role of digital connectivity in our everyday lives has never been clearer as we tackle the pandemic, and the contract signature for the North lot, involving funding of £384 million, marks a significant step towards ensuring our 100% commitment is delivered across Scotland, including to some of our most remote and rural communities.

Scotland has some of the most challenging locations anywhere in Europe for providing telecoms infrastructure and we are taking additional steps to provide superfast access to some of the hardest-to-reach areas. More than 80% of the build we are funding will provide full fibre to the premises and speeds of up to one Gigabit per second. Complex engineering work to lay 16 new subsea cables will provide resilient connections for our most remote communities and download speeds equal to that experienced in our most urban areas.

We have also developed plans, in parallel with main infrastructure investment, to ensure our 100% superfast commitment is met with our Scottish Broadband Voucher Scheme. This will ensure that everyone can access and benefit from this world-leading digital capability.”

Katie Milligan, Openreach MD, said:

“Getting to this point has been long and complex, and the build in the North, with its wild and beautiful land and seascapes, will bring new challenges to test our engineering inventiveness. We look forward to working in partnership with the Scottish Government to get this vital job done.”

The delayed completion date for LOT 1 is of course no great surprise given the lengthy legal challenge. As a partial solution to this the SG has already launched a new voucher scheme (here), which after a boost from the UK scheme now provides funding of up to £6,500 to help premises not in scope of the R100 contracts, or planned commercial investment, to obtain superfast broadband where ISPs may not ordinarily go.

Smaller “interim vouchers” of up to £400 are also being made available to premises where 30Mbps+ is planned for after the end of 2021 – with an additional £250 for those in the hardest-to-reach areas (this is partly intended to help cover for the LOT 1 delays). But that money doesn’t seem likely to go very far.

Openreach now intends to commence survey work in the North lot area early in the New Year and we should get a better idea of the rollout plan once that has completed. But we strongly suspect that this LOT will run until the end of 2025 or 2026. Lest we forget that the original R100 ambition was to bring 30Mbps+ speeds to “every single premises in Scotland” by the end of 2021 (March 2022 as a financial year).