Two providers aren't enough for a competitive broadband strategy

With only two companies approved to bid for the government's broadband contracts, fears have been sparked that the process won't be competitive enough.

The first stage of the Broadband Delivery UK framework saw nine telecoms firms make it through, but by the end of the process seven of them had pulled out, put off by the significant complexity and expense that rolling out broadband to rural communities entails.

That leaves BT and Fujitsu as the only companies in the running for the contracts, which are a vital element of the government's plan to bring super-fast broadband to 90 per cent of the UK by 2015.

Should we be concerned that the coalition's broadband strategy now effectively hinges on just two providers?

On the face of it, this isn't necessarily a problem - both BT and Fujitsu are huge telecoms businesses with extensive experience in deploying broadband networks.

Some successes have already come out of the framework. In Lancashire, the county council and BT have joined forces for a project that will see fibre optic broadband rolled out to 97 per cent of local homes and businesses by the end of 2014.

However, that's not to say that the process will prove equally as effective for every council.

BT has repeatedly expressed its intention to bid for every one of the contracts, but Fujitsu is unlikely to do the same. That means some councils will find themselves in a situation where only one provider is prepared to fulfil their broadband strategy, and that certainly doesn't sound like a competitive process.

Consider the implications for Cumbria if Fujitsu had chosen not to apply for its broadband contract.

Cumbria County Council rejected the strategies put forward by BT and Fujitsu on the grounds that they weren't ambitious enough, but if only one company had bid for the project then the local authority would have been stuck with a substandard broadband plan.

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