BT goes all-in to win £1bn stake
BT claims this will reduce procurement costs of the programme, which aims to boost download speeds in up to 20 cities to 80Mbps to 100Mbps. It could cut procurement costs further if public service networks are included.
Speaking at today’s Westminster e-Forum conference on broadband funding, BDUK CEO Robert Sullivan confirmed ministers are looking at the cost, speed of roll-out and competition implications of the proposal.
“The general principle is that they will give cities choice around these things unless they think there’s a compelling reason against that,” he says.
BT and Fujitsu Telecom are the only firms from an initial nine to qualify as network suppliers under the BDUK framework.
If ministers agree to BT’s proposal, they will hand it a winning hand in competing for over £1bn in taxpayers’ money from state aid subsidies to expand coverage and speed of broadband networks.
Sullivan says the government is confident that the state aid elements of the BDUK framework will receive European Commission approval during autumn. Brussels’ DG Competition has been worried about conditions that govern wholesale access to networks supplied under the framework, he says.
However, cities like Manchester and Birmingham indicate that their applications for state aid went through quickly because they want their metro networks to offer dark fibre. Up to now BT has not offered a dark fibre product, nor has it been willing to sell services using other carriers’ infrastructure.
BT is prepared to resell wavelengths on its fibre using a product called VULA (virtual unbundled local access), but TalkTalk’s Andrew Heaney says pricing of this product is presently unregulated. He says Ofcom needs to cap the profitability of VULA before ISPs take a serious interest.
A Fujitsu spokesman says it’s business as usual with respect to the BDUK framework. Fujitsu Telecom remains, with BT, the only two approved suppliers of next generation broadband to the 40-oddcouncils that are working through the framework.