David Cullen NYnet
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David Cullen, CEO of NYnet, speaking at INCA Seminar 'Models for Next Generation Broadband, 24 November 2011

David Cullen, CEO of NYnet, speaking at INCA Seminar 'Models for Next Generation Broadband, 24 November 2011

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David Cullen NYnet David Cullen NYnet Presentation Transcript

  • The Connecting North Yorkshire Model for Rural NextGen David Cullen, Chief Executive NYnet Ltd INCA Seminar York, 24th November 2011 1SLIDES/1111–CNYbroadband
  • What is the Broadband problem in the sub-region? è  Geography and population distribution mean that telcos will not develop the infrastructure necessary to provide B/B to many NY residents è  Low number of connections (= users) per kilometre of network = unattractive commercially è  Large number of no-spots where “proper” B/B is simply not available 2SLIDES/1111–CNYbroadband
  • 3,200sq miles and 0.7million people 3SLIDES/1111–CNYbroadband
  • Some other relevant statistics è  Approx 18% of population receiving below the USC è  Approx 45,000 residents (7.6% of population) unable to access any usable BB è  13.7% of working age population self employed (8.4% YH, 9.4% national) è  Self employed + micro-businesses (1 − 4 people) account for 49% of jobs in Dales and 37% in Moors 4SLIDES/1111–CNYbroadband
  • NYnet – long standing objectives 1. Provide an infrastructure capable of delivering advanced next-generation broadband services to the public sector, citizens and business. 2. Provide ‘faster, better and cheaper’ public sector networks to enable more efficient and effective public and corporate services. 3. Stimulate economic growth through helping the market to deliver next-generation broadband services to business and residential users. 5SLIDES/1111–CNYbroadband
  • NYnet – bringing the ‘anchor tenants’ Connectivity customers •  WAN 2 - 172 non school sites Over 800 (90%) public - 375 schools sector sites: •  Districts + Police + Fire + 2 x Parks the largest and most •  PCT – 130 sites successful PSN in the •  1 other public sector organisation UK? •  9 business parks •  7 community schemes covering over 20 communities Value Added Services •  VPN Services Turnover for NYCC 2011/12 Forecast - £8.3m •  DR Framework 6SLIDES/1111–CNYbroadband
  • The Connecting North Yorkshire Vision Our vision is to bring the advantages of high- quality broadband to 100% of businesses and citizens in York and North Yorkshire by 2017. We want to enable all to participate in the digital world so that they can carry out their business when and how they wish. High quality B/B = B/B appropriate to people’s needs 7SLIDES/1111–CNYbroadband
  • Brief History of CNY June 2009 Government release Digital Britain (DB) report Sept 2009 NYnet Board considers implications of DB report 2 responses proposed è address not spots @ 2mbs è Market Towns initiative Jan 2010 NYnet Board approves revised Business Strategy è not spot pilots to test technology etc è Market Towns – identify possible £ streams è submission to extend State Aid so can progress above June 2010SLIDES/1111–CNYbroadband State Aid approval confirmed – just needed the £ ! F 8
  • July 2010 Central Government Ambition for Broadband •  We want communities and local authorities to have a say in how these networks will be built. •  Community need should drive the process, not Government decisions made in Whitehall. •  A world class communications network is an essential element of recovery and will help us to grow the economy. •  The delivery of public services will be more efficient and cost effective, as well as more inclusive, and this is crucial for local authorities. •  The strategy brings together the many policy areas that we are working on across Government which will enable this to happen, as well as setting out the Government’s approach to investing the £530m secured as part of the TV Licence FeeSLIDES/1111–CNYbroadband settlement to help deliver superfast broadband into more rural and remote locations. F 9
  • July 2010 BDUK launched •  2 key strands: è universal service commitment (USC) @ 2 mbs) = NYnet’s vision è Next Generation Access •  part of DCMS – staffed by civil servants + consultants •  local authorities to lead •  want to do pilots Aug/Sept 2010 NYCC/NYnet submit proposal to become a BDUK pilot based on •  NYnet’s exising track record •  State Aid approval in place F •  discussions re ERDF funding already in hand (= matched funding) 10SLIDES/1111–CNYbroadband
  • October 2010 Informal advice from BDUK re pilot status for NYCC 10 Dec 2010 Formal BDUK letter – NYCC one of 4 ‘superfast broadband’ pilots 28 Jan 2011 Presentations to LGNYY – unanimous support 24 June 2011 9 Feb 2011 Inaugural meeting of CNY Board, consisting of three main stakeholders: BDUK, NYCC, NYnet 11SLIDES/1111–CNYbroadband
  • CNY Board responsible for è  preparing Vision (and Strategy) è  securing funding BDUK NYCC is the ERDF Accountable Body Performance Reward Grant anything else è  overseeing the procurement – being undertaken by NYnet as sub contractor to NYCC è  manage interface of CNY with existing NYnet business è  liaise with stakeholders è  comms/PR è  Go ON project 12SLIDES/1111–CNYbroadband
  • Procurement – Key dates •  OJEU published  •  Expressions of interest received  •  Shortlist agreed by CNY Board  •  Invitation to participate in dialogue - ends Nov 2011 •  Invitation to continue dialogue - ends March 2012 •  Final Tenders submitted - early June 2012 •  Contract Awarded - late June 2012 •  Roll-out begins / ends - Q3 2012 / Q2 2014 13SLIDES/1111–CNYbroadband
  • As modelled CNY will provide è  Next Generation Access to market towns (= 45% of population) è  high-speed hubs to approx 250 communities that will provide backhaul infrastructure for community projects using Partners who provide the Access Network and Internet Services On average 1 hub will support 3 parishes – there are 731 parishes, of which 356 have < 200 residents è  ultimately ratio of market towns to hubs will depend on £ available relative to outcome (= cost) from procurement process è  estimate need £50m to complete the Vision 14SLIDES/1111–CNYbroadband
  • ‘Before Connecting North Yorkshire…’ Now York & Harrogate “Superfast” = >24Mbs + ‘Market Towns’ c. 8Mbs near exchanges Rural Areas/ small Market c.2Mbs with high contention Towns (lots of people using the same bandwidth) ‘Deep Rural’ 0.5 – 2Mbs (the ‘poor/ not spots’: 18% of N Yorks- highest in the country) 15SLIDES/1111–CNYbroadband
  • ‘……..and After’ Now Following CNY York & Harrogate “Superfast” = >24Mbs + No change ‘Market Towns’ c. 8Mbs near exchanges >= 24Mbs Rural Areas/ small Market c.2Mbs with high contention 2 - 24Mbs depending on Towns (lots of people using the l o c a t i o n , t e c h n o l o g y, same bandwidth) investment etc ‘Deep Rural’ 0.5 – 2Mbs (the ‘poor/ not Target of <2% with 2Mbs, spots’: 18% of N Yorks- rest 2 – 24Mbs as above highest in the country) 16SLIDES/1111–CNYbroadband
  • The Strategy for 100% Coverage D:  Areas  with  minimum  of  2MBs  (satellite  etc)   Category  D  Target:   <2%   C:  Infill  areas  requiring  grant/  fund   support  to  achieve  2-­‐24Mbs   Categories  B&C  Target    c.  8-­‐23%   B:  Infill  areas  at  2-­‐  24Mbs   funded  through  CNY       Category  A  Target:   A:  Areas  receiving  >24MBs   75-­‐  90%   through  CNY    SLIDES/1111–CNYbroadband 17
  • Commercial Models è  State Aid Approval (and common sense) requires procurement to consider various commercial approaches è  ‘Traditional’ Gap Funding of a telco’s own network è  Design, Build and Operate (DBO) an infrastructure for the Authorities (NYnet and NYCC) to run and receive income è  A DBO+, where the telco partner also invests for share of revenues/ margins è  Gap Funding will always favour an incumbent or determined entrant with deep pockets comfortable with a long RoI è  Bidders remain interested in both models 18SLIDES/1111–CNYbroadband
  • Investment Issues è  Still have a ‘worst case’ of £18m shortfall over 10 yr business case: è  Modelled need for £50m è  £17.8m (BDUK) + £8.5m (ERDF 47% match) = £26.3m è  Anticipated margins from public sector ‘anchor tenants’ revenue- the key differentiator in N Yorks è  Good news: plenty of capital on the global investment markets for secure, stable infrastructure initiatives è  Bad news: UK Broadband not seen as ‘secure and stable’ è  Need to do all we can to change this perception and help suppliers raise investment 19SLIDES/1111–CNYbroadband
  • An example: rural price sensitivity…… Installation Rental Maximum Existing Project Speed Cost Cost available service NANDS 5-10 mbps £100 £20 - £30 70 mbps 0 Gillamoor Various £0 £12 70 mbps 0 VOM 10 mbps £100 £15 - £25 70 mbps 0 – 1.5 mbps Bradley 5-10 mbps £50 £13 - £19 70 mbps 0 – 1 mbps Barlby 5-10 mbps £50 £13 - £19 70 mbps 0 – 1.5 mbps RHB 10 mbps £0 £12 70 mbps 0 N u n 2–20 mbps £100 £15 - £25 70 mbps 0 – 1 mbps Monkton 20SLIDES/1111–CNYbroadband
  • …. vs take-up Project Project Target Actual Planned % Start Date NANDS 04/03/2011 As many as 68 141 48 possible Gillamoor 01/09/2010 As many as 120 150 80 possible VOM 04/03/2011 107 107 150 100 Bradley 04/03/2011 100 047* 200 47 Barlby 04/03/2011 100 027* 150 27 RHB 07/09/2011 100 ** 200 ** Nun Monkton TBA 100 ** 100 ** Key * first quarter figures ** not operational yet 21SLIDES/1111–CNYbroadband
  • Summary è  ‘Think like a telco’…. è  Find a champion/ champions- at every level è  There isn’t enough money to go around, public sector need to invest all it can è  Public Sector aggregation plays a major part è  Engage communities and community level providers è  Explore alternative models that can bring different investment and enable local communities 22SLIDES/1111–CNYbroadband
  • David Cullen Chief Executive, NYnet Ltd david.cullen@nynet.co.uk 23SLIDES/1111–CNYbroadband