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Government admits altnets can compete against BT in rural areas

A series of pilot schemes has proved that small broadband suppliers can effectively compete against BT Openreach in rural areas

Small and innovative broadband suppliers can compete effectively against the likes of larger concerns such as BT Openreach and Virgin Media in delivering superfast broadband in rural areas covered by Broadband Delivery UK (BDUK), the government has said.

The revelation followed a series of pilot schemes considering different ways of delivering connectivity, to better understand the capabilities of smaller suppliers, or altnets.

Speaking to Computer Weekly, Chris Townsend, CEO at BDUK, said this did not mean the BDUK procurement process had been flawed and skewed in BT’s favour from the outset.

“I think we went through the proper procurement process for Phase 1, and that has been well documented by the Public Accounts Committee, the National Audit Office and in the media,” Townsend said.

“The success of the BT rollout has delivered 3.5 million premises to date and is scheduled to hit 4 million this spring.”

Townsend said the government would renew efforts to involve smaller suppliers in Phase 2 of BDUK, where £120m worth of contracts around the country remain up for grabs.

“At this point we are working with each local body, sharing details of the Market Test Pilots, and presenting the results locally and encouraging them to engage with smaller suppliers at supplier events,” he said.

It will focus on the long-term sustainability of the projects, ensuring that the altnets that delivered them can deliver larger scale installations beyond their limited test beds. Partnerships forged with other public network owners, such as academic network Janet and Network Rail Telecom during the pilots, will further extend opportunities to deliver services.

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The technologies under evaluation during the year-long Market Test Pilot scheme were satellite, by Avanti and Satellite Internet; fixed wireless, by Airwave, Quickline and AB Internet; and a mix of fixed wireless and fibre, by Call Flow and Cybermoor.

Five smaller suppliers – including fibre-to-the-premises (FTTP) specialist Gigaclear and fixed fibre and wireless hybrid network supplier Call Flow – have already bid for and won 10 BDUK Phase 2 contracts in total.

Lessons learned

The government said it was taking three principle lessons away from the Market Test Pilot scheme: that suppliers can successfully mix technologies to offer cost-effective broadband in areas that are hard to reach; that small suppliers can effectively bid for, win and deliver open public procurements at competitive costs while meeting EU rules on state aid; and communities can work with suppliers to create viable commercial conditions for local networks.

Andy Conibere, managing director at Call Flow, said that participating in the Market Test Pilot programme had allowed him to improve his business’s processes and lead change in the industry.

“As a result, we have been able to successfully bid for, and win, significant state aid funding to build similar solutions in Berkshire,” he said.

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

Malcolm Corbett, CEO at the Independent Networks Cooperative Association, said: “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.”

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