Fears that Digital Region project may stall
The Yorkshire Post has highlighted the fact that low take-up for the Digital Region project in South Yorkshire means a lack of funds for the final 17% of the roll-out that was originally intended to be funded via profits from the first 80% of the roll-out.
Digital Region appeared on the scene in 2008, with a £112m plan to provide VDSL services to some 97% of homes and businesses in South Yorkshire. This was at a time when the nascent FTTC/P plans from Openreach were just plans; by the time the Digital Region project started taking live customers in 2010, the competition would be much greater.
The lack of take-up we suspect is down to a number of factors:
- Price compared to existing broadband solutions
- No big household name signed up to offer the service
- People in the areas where it has rolled out already, happy with the 5 to 8Mbps they actually already receive, or may already have Virgin Media cable broadband.
- Competing roll-out of FTTC by Openreach/BT Wholesale based providers
- Lack of awareness that this option is available to people in the area, the Digital Switchover project may be confusing some people due to the similarity in naming.
- Difficulty in finding information for consumers - it took four clicks to find the four residential providers on the Digital Region website, and then having to look at each site in turn to find pricing.
Price wise, a basic up to 24Mbps downstream (2Mbps upstream) 50GB a month service can be purchased for £16.50 a month, which when you compare it in advertising terms to the local provider Plusnet, which charges £11.49 for its 60GB up to 20Mbps service (10GB at £6.49), looks a lot more expensive. Though due to the FTTC architecture of Digital Region the vast majority of customers should connect at 24Mbps, where as Plusnet and all other ADSL2+ based providers will have a much lower average connection speed. Plusnet do offer FTTC services now from £16.49 a month, thus are comparable on price, but generally even with established providers take-up is still a lot lower than the standard products.
The Yorkshire Post has restated claims by a Barnsley Council member that BT is over-charging. Something that was a common complaint when LLU services were entering the mainstream in 2005/2006, back then the early entrants into LLU were not always the ones to have mass success. The old problem that trail blazers do the hard work for the savvy business person to later make a killing is very true.
Looking to the future, one possibility is that Digital Region may receive some funding from the BDUK to help reach the final 17% of its plan. In some ways the mistake of the original plan was to try and compete in cities and urban areas, limited roll-out in these areas to provide council and business services, with residential services concentrated on the areas where there is likely to be less competition would likely have created higher take-up.
Digital Region does carry a very salient warning to those parts of the UK currently looking into how to handle the BDUK funding as an open wholesale network is no guarantee of success. The vast majority of the public are unlikely to switch broadband provider until their existing broadband provider contacts them to offer an upgrade. Also the price must compete with what is already available, as many will look at the price tag before considering anything technical about the service even if they do.