Broadband Delivery UK

Transform Digital Conference

Chris Townsend – CEO Broadband Delivery UK

Department for Culture, Media & Sport

The importance of the digital economy

• Internet economy in the UK is worth 8.3% of GDP – more than any other G20 country and twice the G20 average – and is projected to grow to 12.4% by 2016 (Boston Consulting Group, March 2012)

• The digital economy comprises 270,000 active companies in the UK, for which revenues are growing 25% faster than non-digital counterparts (NIESR, July 2013)

• Online retail sales are projected to be 23% of total retail sales by 2016 (BCG, March 2012)

• Faster broadband is estimated to add £17 billion to the UK’s economy by 2024 (SQW for DCMS, Nov 2013)

Department for Culture, Media & Sport

The position today

BT superfast coverage only(incl. commercial & non-BDUK)

BT and Virgin premises

Virginonly

76%9%

21.912.9

45%

2.7

Number of UK premises (millions)

UK % premises coverage of superfast broadband

100%

28.8

73% as at June 2013

Gap

• Commercial deployment has taken the UK ahead of its European competitors. • UK now leads the top five EU Member States for broadband and mobile

coverage, take up, usage, choice and price (Ofcom European Broadband Scorecard 2014).

• Superfast broadband is now available to 73% of UK premises – up from 45% in 2010 – and superfast broadband take-up is 25%, up from 5% in 2011 (Ofcom).

• But almost 7 million homes and businesses across the UK will not be covered by the commercial roll out. Tackling these remaining premises will deliver economic benefits and reduce the digital divide

Department for Culture, Media & Sport

3-phased approach

BDUK is delivering the Government subsidised Superfast Broadband Roll-out programme:

Phase 1: (£530m to reach 90 % of UK premises by 2016; and standard broadband (2Mbps) for all by the end of 2016).

Progress: 44 projects across the UK; Already reached more than 500,000 new premises. Roll out is accelerating: now at 20,000 per week and rising to 40,000 per week. Will pass 1 million premises by the summer.

Phase 2: (£250m to reach 95% of the UK by end of 2017).

Progress: 35 new projects. 4 already under way. BDUK aiming for local bodies to complete majority of new procurements by December 2014 and remainder as early as possible in 2015.

Department for Culture, Media & Sport

Phase 3: The hardest to reach areas

Phase 3: (Exploring options for going beyond 95% incl £10m market test pilots

testing new solutions).

Progress: 26 suppliers responded to the ITT, with bids that offered solutions

using:

i. Proven technologies deployed in hard to reach areas; .

ii. novel operating models;

iii. innovative public / private funding models.

Winning bidders to be announced in June 2014. Aim to have initial findings from

projects on new solutions for the hardest to reach areas by September 2014.

Department for Culture, Media & Sport

Support for local community projects

Rural Community Broadband Fund (BDUK and Defra):• 3 projects going ahead (Rothbury, Fell End, Northmoor) and 3 have conditional offers• 17 local communities have funding for extra coverage through their LA contracts• 4 further projects have submitted initial proposals for funding

Other local projects:• Community projects e.g. B4RN in Lancashire• Commercial supplier projects without public funding (Gigaclear, CityFibre etc)• Projects with local public funding (CallFlow in Kent, AB Internet in Lincs, Air Band

Community Internet in Worcs) - BDUK has given state aid clearance

Important that communities are able to take forward projects in NGA white areas:• Communities can ask LAs for coverage plans• BDUK also encouraging all LAs to publish coverage maps to 7 digit postcode level

Phase 3: BDUK expecting a number of community-focused bids as part of the £10m phase 3 pilots and will carefully review the models put forward

Department for Culture, Media & Sport

Super Connected Cities Programme

• £150m to support 22 major UK cities develop digital infrastructure capability assisting them remain internationally competitive and attractive places to invest, visit and do business.

• In December launched the Connection Voucher Scheme to help SMEs access faster and better broadband. The scheme provides grants of £250 to £3,000 to cover capital connection costs and is administered by the cities through over 350 registered suppliers.

• Also providing free Wi-Fi to around 1000 public buildings (libraries, museums and community centres) by 2015; and supporting wireless coverage in major city centres.

Department for Culture, Media & Sport

We are also addressing gaps in mobile coverage

95% 100%0%

27.30.0 Number of UK premises (millions)

UK % premises coverage of mobile phone services

28.8

• Mobile Infrastructure Project (£150m) is addressing the 0.3-0.4% of premises without any Network Operator coverage (complete not spots). The project aims to provide coverage to:

7 out of the 10 A Roads in not spots; and 30k+ of the 70k premises with no coverage at all.

• DCMS is also looking at how to address areas with partial coverage

All operators (voice 2G)

[A] <1% complete notspots

MNOs 4G roll out to 98% (indoors) by end 2015

[B] 4% partial notspots

Department for Culture, Media & Sport

Benefits of the investment!Uplift to GVA of £6.3bn by 2024 (phase 1)

Broadband Impact Study, SQW for DCMS, Nov 2013

Department for Culture, Media & Sport

BDUK Priorities April – June

• Managing relationships with key suppliers to accelerate delivery.

• Award contracts for Market Testing Pilots and develop BDUK’s understanding of the role of communities and local bodies in making these projects successful.

• Securing public support and recognition for the programme and BDUK.