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Report: Pilot projects show small broadband suppliers can take on the big boys

Thursday, February 4th 2016 by Ellen Branagh

A government-backed scheme to get superfast broadband to remote parts of the UK has proved that small suppliers can take on telecoms giants, according to a new report.

The government’s Department for Culture, Media and Sport (DCMS) released a report on the early findings from its BDUK Market Test Pilots.

The series of pilot schemes were set up to look at different ways of delivering superfast broadband to some of the country’s most sparsely populated rural areas as part of the government’s effort to reach 100% of the UK.

That includes the so-called ‘final 5%’, which adds up to about 1.5m premises spread across 70% of the UK’s landmass. Of these, a fifth are in urban areas.

The pilots have been running for more than a year testing alternative technologies including wireless and satellite, as well as different commercial and operational models.

The seven pilot projects include satellite providers Avanti and Satellite Internet; Airwave, Quickline and AB Internet, who are using fixed wireless; and Call Flow and Cybermoor, who are using a mix of fibre and fixed wireless technologies.

Releasing the report, DCMS said the pilots had shown that smaller suppliers can compete against industry giants like Openreach and Virgin Media.

Five independent suppliers have won contracts as part of Phase 2 of the BDUK rollout, which aims to take coverage to 95% of the UK by 2017.

The pilots demonstrated that suppliers can successfully mix technologies to deliver cost-effective superfast solutions in hard-to-reach areas, the report said.

They also show that smaller suppliers can bid for, win and deliver open public procurements at competitive costs, including meeting the necessary EU state aid requirements for getting public funding.

The government is now discussing with suppliers how to ensure the long-term sustainability of their projects and how the lessons learned can be applied to help extend the superfast broadband rollout to areas not covered by existing plans.

'An opportunity'

Digital minister Ed Vaizey said: “Our pilot scheme has demonstrated that alternative technologies can help us take superfast speeds to the hardest to reach areas of the UK and I’m very pleased that smaller suppliers are now competing for, and winning, contracts for the next phase of the rollout.”

Malcolm Corbett, CEO of the Independent Networks Cooperative Association (INCA), added: "We are really pleased that these pilots have given an opportunity for smaller suppliers to showcase what they are capable of, and have led to more BDUK contracts being awarded to alternative suppliers.

“I look forward to many more public contracts being awarded to smaller suppliers in future.”

Call Flow's managing director Andy Conibeare, said the company had been able to bid for, and win, state aid funding to help take superfast speeds to Berkshire.

“Call Flow are now planning to build on this experience, and will be bidding for the state aid funded opportunities in the coming months, with contract values exceeding £50m," he said.

“Additionally, we are exploring funding options to take advantage of the significant commercial opportunities that still exist that do not require state aid intervention.”

Last year, Mr Corbett told Cable.co.uk that money being reinvested in the government's superfast broadband rollout should be made available to alternative providers as well as to BT.

Mr Corbett said cash being reinvested in superfast projects as the result of a clause in BDUK contracts should be put to competitive tender, allowing ‘altnets’ to play a part in taking faster speeds to hard-to-reach areas.

At the time he said: “It is the alternative providers that are often willing to invest in digitally-deprived areas when others would prefer to wait for a subsidy to materialise.”

In September the government announced free satellite broadband installation for homes and businesses with some of the worst speeds in the country.

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