I hear that Fujitsu has withdrawn from the race for the BDUK funding. It always seemed strange to me that Fujitsu would be chasing the contracts in the first place. Someone like Virgin maybe companies with an established network and pedigree in the UK.
Its a shame for rural areas that Virgin didn’t see any economic sense in pursuing the farming market.
Unfortunately we are heading back to a BT monopoly for many areas of the country. The shame is that this doesn’t make it efficient for me and you, the taxpayer that is handing their cash to BT to “service” rural communities. There is no incentive for BT to cut costs.
For example one of BT’s most expensive elements in rolling out networks to far flung places is the cost of laying fibre in the ground – between £25 and £140 per metre. I’m sure these costs will be genuine. However if BT had competition in these areas that cost of laying fibre is one where they would be busting a gut to make savings. Remember that the Caio report estimated that of the £29billion it would cost to roll out fibre to every home around £25billion of that was in the civil engineering work involved in digging up the roads.
I realise that BT has a challenge on its hands in supporting its ancient copper network – witness my own recent experience. I wish I knew what the answer was. Complete separation of Openreach from the rest of BT might give us a warm and comfortable feeling from the level playing field perspective but it still wouldn’t make their market any more competitive.
It needs true competition. BT will tell you the market isn’t big enough for this to happen.
I’ll finish by returning to the opening remarks on this post and to say that I don’t think I’ve heard a single person talking about the whole BDUK procurement process and saying what a good job they have done. In one sense The Department of Culture Media and Sport will say that the spending of the money is under way, rural broadband projects are kicking off and that is what is important. Having been helping Nottinghamshire County Council with its bid I can see that this whole project has been hidebound by red tape. In one sense it is a miracle that anything gets done in this bureaucracy dominated world we live in.
DCMS should however also be asking themselves whether they have done a good job in getting the best value for money for UK plc in establishing a bidding environment where only BT felt it worthwhile pitching for the business.