Fujitsu pulls out of Wales
Monday 23 January 2012 15:37:29 by Andrew Ferguson

Since the inception of the Broadband Delivery UK project in the UK, there have been those who saw the various rules and regulations involved as favouring the BT Group. The news on PC Pro that Fujitsu is voluntarily withdrawing from the bidding process in Wales will reinforce the opinions of those critical of the BDUK process.

"After careful consideration, Fujitsu felt the risk levels within the Welsh Government contract terms were too high and therefore had no alternative but to withdraw.

Fujitsu, however, remains focused on Next Generation Broadband projects in other regions where the terms are more agreeable."

Fujitsu statement

The BDUK project was intended to allow commercial projects to extend their reach, beyond the two thirds of the UK where the commercial returns on investment were reasonable. It seems if Fujitsu is withdrawing then its plan to extensively use fibre to the home in an area like Wales would require too much investment from them, and thus increase the size of the risk to shareholders. In short the money on offer via BDUK and Welsh Assembly was probably too small. Installing full fibre to the home when the money from BDUK was often only around £100 per home, meant that unless the BDUK money was invested in a much smaller part of the UK then full fibre was always unlikely to happen.

Can this be seen as a failure of the Government or Welsh Assembly? Well it all depends on where you are sitting, Westminster will blame the Welsh Assembly and vice versa, the opposition will also add its own issues. The reality is that the amount of money promised between 2012 and 2017 by the previous Labour Government was pretty much the same.

At least Fujitsu is indicating it is still working with other regions, and for those authorities where the not-spots are not so geographically dispersed there is a real chance still of a solution where full fibre to the premises is the dominant solution.

The Openreach solutions rely heavily on a partial fibre to the cabinet (FTTC) solution, due largely to its lower cost per home passed. Original estimates from a few years ago had FTTP costing some £29 billion and FTTC £5 billion to cover the whole UK. It is likely though that Openreach will deploy some FTTP in each region where it wins the BDUK process, though probably only 10% to 20% of the homes covered by the BDUK funding.

The result of todays news, is that while people in Wales should still see superfast broadband hitting a coverage level well above that of other similar countries, it will have small businesses and consumers looking for another wave of upgrades in seven to ten years time. The Digital Divide between rural areas and those with both BT and Virgin Media operating will still exist though.