Another game of Monopoly. Fujitsu abandons UK rural broadband market, leaving BT as the only player.

Mar 19, 2013

This is both a joke and a disgrace. Although the UK government's Broadband Delivery UK programme, (or BDUK for short), sounds like something the marketing department of a country dairy might have come up with circa 1972 to try to boost the self-esteem of its milkmen without having to give them a pay rise, it is actually designed to convince consumers living in the bucolic pastoral idyll that is the rural UK that they are experiencing the technological white-heat of the 21st century, when, in truth, most are still living with communications infrastructure that has changed little since the 1960s.

The build-out of rural broadband networks in the UK was supposed to be open to competition. In reality only BT and Fujitsu ever won "preferred bidder status" and, one-by-one, other would-be rivals got the message, stacked their cards, threw in their hands and left the table.

They did so after it became evident that "preferred bidder" status could be a poisoned chalice. The reality of the situation was that BT bid only for the rural contracts most likely to provide it with comparatively easy and inexpensive deployment and comparatively rapid profit and declined to bid in other areas. The notion that the UK would have a national rural broadband network, (even at the laughably antiquated access rate of 2 whole Mbits) was given the lie and now even Futitsu has realised that it is on a hiding to nothing and has given up.

Putative rivals to BT complained that the entire, convoluted, tendering process and the deployment conditions laid down by the government favoured British Telecom from the very start and that the much-vaunted claims of creating a competitive environment for the deployment of rural broadband were no more than window-dressing to disguise the fact that the incumbent would get the tasty meaty morsels and its rivals would get the gristle and bone.

In unpleasantly triumphalist statement made to the Financial Times newspaper by BT, the incumbent national telco says, "If other companies have withdrawn from the process it is because they are unwilling to invest the large sums that are required without being guaranteed a short-term return. That is despite several of them pledging to make such an investment. In contrast, BT has stood by its promises saying it will invest up to a billion pounds via the process but accepting that the payback period will be more than ten years."

That's one side of the story, and very one-sided story it is too. Let us remember that, back in the autumn of last year, the British Cabinet Office pulled the rug out from underneath Fujitsu and destroyed its ability to pitch for rural broadband contracts by ruling that the company is "too high-risk" to be considered for public service contacts.

Also in 2012 the government turned all the heavy guns it it could bring to bear on a fight with the European Commission (EC) over the evident lack of competition in the UK's rural broadband market. The action stopped the deployment process in its tracks and build-out only slowly resumed when the EC finally and reluctantly allowed that a degree of state-aid is acceptable for rural fibre network deployment.

And the net result of this farce? An increase in the digital divide between town and country, the establishment of a de facto monopoly player in the sector and yet another revision in the already much-revised timetable by which the coalition government has promised to make "Broadband Britain" a reality.

It had been claimed that 90 per cent of homes and businesses across England, Wales, Scotland and Northern Ireland would have access to "superfast broadband" services by by 2015. No official definition of exactly what constitutes "superfast broadband" has yet been provided by the powers-that-be and the date of the approaching digital nirvana has been pushed back again - this time to 2016 - or later.

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