BT only bidder in 2 out of 3 Scottish R100 contract areas
One of the old complaints that BT tended to win the first phase of BDUK contracts by default has resurfaced with an update from the Scottish Government on the progress of the R100 procurrement process.
BT is the only bidder in the Central and Southern lots and any detail about the bid is expected to be released later in the year once the contract is signed. The remaining Northern lot has multiple bidders so until the winner has been decided everyone can continue to play guessing games.
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.Scotland’s Minister for Connectivity Paul Wheelhouse on R100 update
One part of the update outside the quote might surprise some people i.e. "Ofcom’s most recent Connected Nations report showed Scotland outperforms the UK as a whole when it comes to new broadband deployment.", this is referring to pace of the roll-out i.e. change in a 12 month period between the Connected Nations Reports rather than absolute coverage percentages which we believe the majority of the public will take this statement to mean. Our monthly graph of our tracking of the roll-outs shows how things have progressed in Scotland since 2012.
As you can see the pace slowed down substantially at the start of 2018, reflecting that by early 2018 all the easy to deal with low cost higher density areas had been covered and from that point on the size of cabinet areas for new VDSL2 cabinets was substantially smaller and the focus also shifted to FTTP.
The standard battle of words between Westminster and Holyrood continue, with the attack that Westminster is only putting 3.5% of the cost towards the R100 scheme compared to 96.5% (total commitment £579m). This does seem unbalanced but then phase two contracts in English Local Authorities have tended to have smaller input from Westminster compared to the local authority and the intervention costs being made available as part of R100 pretty much drawf any of the other contracts we have seen. A reminder of what was given as the project size and funding in 2017 is worthwhile.
The two lots BT is set to be the builder on are:
- Central, formed of the central belt and Fife with £83 million of funding and an expected size of 53,570 premises.
- Southern, comprising Scottish Borders and Galloway and is 26,090 premises expected to need intervention with £133 million allocated
Until the contract is signed and basic details made public we won't know what the planned contribution from BT is, but the basic maths gives an average intervention cost of £1,549 per premises in the Central lot and £5,097 per premises in the Southern lot. If BT cannot deliver full fibre connectivity to every one of the premises in these two contract lots then there needs to serious questions raised about the costs and how BT is building its full fibre network.
The remaining Northern lot where bidders are fighting it out covers some 99,288 premises with £384 million of funding. The area being Highlands and Islands, Angus, Aberdeen and Dundee and the maths gives an intervention cost of £3,867 per premises.
The three lots comprise a total of 178,948 premises and based on our latest figures from the night of 10th October 2019 we believe there is 168,294 premises in Scotland who cannot receive a 30 Mbps or faster service. If we roll the clock back to the end of January 2018 the number without access to a superfast service was 188,400 premises.