News
Government-backed broadband rollout scheme extends coverage target in northern county after strong performance.
The U.K. government’s ongoing project to extend high-speed broadband connectivity to difficult-to-reach parts of the U.K. has been particularly successful in County Durham, leading to a new 98% coverage target, the government disclosed at day two of Total Telecom’s Connected Britain event in London on Thursday.
But while Broadband Delivery UK (BDUK) boss Chris Townsend talked up the speedy return on investment (ROI) the scheme achieved in the north of England and shared the government’s ambitions to replicate the pattern elsewhere, questions were naturally raised over the need for a government-backed project in an area that appears to have been commercially viable after all.
In 2013 60% of premises, including homes and businesses, in County Durham had access to superfast broadband services, BDUK chief executive Townsend explained. The government aims to extend superfast broadband access to 95% of the U.K. population by the end of 2017, but the BDUK-backed project in County Durham has been so successful that on Thursday Townsend announced a new target of 98% coverage by the same date in that region.
In all, the scheme will have connected "more than 140,000 premises in this one county alone," Townsend said.
The number of small businesses in the county has increased by 11% in the past three years, while unemployment has fallen to 2.2% from 8.4%, he said. And while BDUK investment plans are usually geared to generating a return in "a five, 10, 20-year timeframe," the Country Durham project brought ROI "in a very short period of time," he said.
As such, BDUK now needs to make sure it can "replicate [that] around the whole of the country," Townsend said.
While progress in County Durham is doubtless good news for homes and businesses there, questions from the floor showed that there is some scepticism in the industry – admittedly from those not involved in BDUK – over the true value of using government funding for network deployments that now appear to have been commercially viable.
"It’s always easier in hindsight," Townsend said, in response to the suggestion that such a quick ROI and strong take-up shows a commercial operator like BT could, and should, have rolled out network there without state support.
However, Townsend declared himself "a great believer" in the intervention model and pointed out that the BDUK contracts include a clawback provision that means BT, the main beneficiary of BDUK, is required to hand back funding for a particular area when take-up exceeds 20%. The U.K. incumbent has already given back £129 million with a further £129 million in the pipeline.
"I still believe it’s the best model," Townsend said, despite the fact that ROI came "sooner than we might have expected."
