1) The BDUK programme has expanded superfast broadband coverage to nearly 90% of UK homes and businesses, up from 45% in 2010, and aims to reach 95% by December 2017. 2) To date, BDUK has added over 3.8 million superfast broadband premises and aims to reach 4 million by spring/early summer 2016. 3) Pilot projects testing new broadband delivery models in hard to reach areas found that alternative providers can cost-effectively provide reliable superfast speeds using various technologies, and that communities can support broadband expansion.

1. BDUK Update
David Hamson, BDUK
INCA event - Shrewsbury
24 May 2016

2. 1. Superfast broadband coverage available to nearly 90% of UK homes and
businesses (up from 45% in 2010); on track to achieve 95% by Dec 2017.
2. BDUK programme added over 3.8 million superfast premises to date and
aiming for 4 million by spring/early summer 2016
3. Access to Universal 2Mbps standard broadband now in place.
4. Have piloted options to provide superfast broadband coverage to hardest to
reach areas.
5. Issued over 50,000 connection vouchers to SMEs
Delivering superfast broadband to the UK

3. UK Superfast Broadband Availability
BT superfast coverage only
(incl. commercial & non-BDUK)
Proportion of UK premises able to receive superfast speeds
BT and Virgin
premises
Virgin
only
BDUK Phases 1 & 2
£1.7bn public funds
95%76%8% 45%
100%
99%
20172015
AlternativeProviders
Final 0.5-1.0% likely to require
high-speed satellite

4. • Now live UK wide: currently approx. 300,000 premises eligible,
reducing to about 200,000 at end of Phase 2
• Allows eligible premises with less than 2Mbps to access a subsidy to
provide a satellite broadband connection
• BDUK will work with Local Bodies and suppliers to ensure eligible
premises are aware of availability
Universal Service Commitment

5. UK Superfast Broadband Availability
BT superfast coverage only
(incl. commercial & non-BDUK)
Proportion of UK premises able to receive superfast speeds
BT and Virgin
premises
Virgin
only
BDUK Phases 1 & 2
£1.7bn public funds
95%76%8% 45%
100%
99%
20172015
AlternativeProviders
Suppliers extending commercial
coverage; Local Bodies re-investing
underspend and clawback

6. • BDUK and Local Bodies need to maintain delivery to reach 90% and 95%
superfast targets and push suppliers to accelerate roll-out
• Complete contracting with remaining existing funding
• Use VfM controls with BDUK support to maximise underspend
• Deploy BT early gainshare funding (£129m)
• Promote further take-up to maximise gainshare
• Press BT, Virgin and other suppliers to maximise commercial coverage
• Encourage communities to register demand e.g. with Virgin’s Cable My
Street, or to explore community funded projects
Actions to extend coverage

7. State Aid Clearance
• UK’s previous umbrella State aid scheme ended in
June 2015
• UK in negotiation with the Commission on an
extension to enable further procurements to gain
State aid cover
• We have notified the Commission and are expecting
a decision very soon.

8. Background to the Pilots
• Market engagement carried out by BDUK in late 2013
indicated that new models would be needed to take superfast
broadband beyond the current target of 95% coverage by
2017.
• In response to this, BDUK launched a £10m Innovation Fund
in March 2014 to explore ways to expand superfast
broadband coverage in technically and commercially
challenging areas across the UK.
• Bids were invited into three lots testing: technology, operating
and financial models. 26 suppliers submitted Pilot proposals.
8

9. Market Test Pilots delivery framework
• Eight Pilots were selected, with seven Pilots continuing on to the
deployment phase after an initial feasibility assessment.
• Deployment across all seven Pilots began in February 2015, and
installation of the networks was completed in March 2016.
• Each of these Pilots was selected following an assessment of their
long term commercial sustainability to continue operating in their
target areas after March 2016.
• The first Pilot customer connections were achieved in March 2015;
total premises passed/connections from across the seven pilots by
March 2016 was less than10,000.

10. • Avanti: 23,500 premises
• Satellite Internet: 420 premises
Seven networks; 0.1% of UK premises
SATELLITE
• AB Internet: 1,600 premises
• Airwave: 270 premises
• Quickline: 4,211 premises
• Call Flow: 1,670 premises
• Cybermoor: 300 premises
WIRELESS
HYBRID – FTTP/FTTC/FWA
All project areas are in the lowest 25
of premises density in the UK, and
four projects are in the lowest 1%
premises density.
Some are in ‘sparse settings’ – a
measure for proximity to towns
0.1% of
UK
premises

11. What we wanted from the pilots
• Generate evidence about the cost, funding options, and
sustainability of the networks
• Build capacity and capability in the supplier market and knowledge
of broadband State aid requirements by disseminating the Pilot
findings
• Generate evidence about expected levels of take-up in hardest to
reach areas and how it can be incentivised
• Collect information on performance in the field and user
experience for different technologies

12. Learnings about smaller suppliers
• The smaller supplier market has the capability:
• They can design and build networks that maintain superfast
speeds and meet the State aid requirements for NGA and basic
interventions
• Smaller suppliers often take advantage of a flexible approach:
• Flexibility can add value by delivering greater coverage and
lower costs
• Smaller suppliers can win customers:
• They can provide services that customers value, and these are
starting to generate good levels of take-up.

13. Wider benefits and learnings
• Communities can work together with suppliers to create viable
conditions for small projects. Creating a standardised offer such
as Cybermoor’s “Broadband in a Box” will make this easier.
• New partnerships have been fostered, including with other
network providers such as Janet and Network rail telecoms.
• New commercial relationships have also emerged which are
likely to be sustained after the pilots. For example, Call Flow
and BT Openreach have worked together to trial the
deployment of new cabinets at new locations requested by non-
BT suppliers.

14. Relatively low cost per premises...

15. ...combined with relatively high coverage
In some of the hardest to reach areas of the UK:
• Call Flow will achieve 96%+ coverage for less than £800 public subsidy
per premises on average through its hybrid approach that combines FTTP,
fixed wireless and FTTC.
• Cybermoor will achieve over 99% coverage of a very sparse and low
density area at £1,220 public subsidy per premises using its mix of 55%
FTTP and 45% fixed wireless.
• Quickline will achieve 100% coverage of their area at just £475 public
subsidy per premises. While Quickline is using only fixed wireless
technology, it is displaying flexibility by mixing Line of Sight and Near Line of
Sight technology.
• Avanti and Satellite Internet reach 100% coverage at between £330 and
£800 per premises.

16. Innovative approaches have helped to drive down
deployment costs
• Call Flow’s hybrid model includes multiple build methods
and technologies to suit the challenges of each location –
Physical Infrastructure Access (BT’s ducts and poles), new
fibre on new poles, direct buried new fibre on private or
Highways land, testing a variety of mole ploughing
techniques, SLU, wireless
• Quickline’s reuse existing infrastructure and use
temporary masts while awaiting planning consent
Innovations driving down costs

17. What are customers saying?
• 94% were more satisfied with
their Pilot service than their
previous broadband – this was
consistent across the
technologies
• The three most popular benefits
of new broadband identified by
respondents were speed,
reliability and cost.
• Only 2% of respondents do not
intend to keep their new
broadband at the end of the pilot
period, if the price remains the
same.

18. Take up so far
Take up so far across the Pilots is encouraging, but variable:

19. • Non-fibre based technology suppliers can deliver reliable, superfast-capable
broadband speeds and a high quality of broadband service.
• Suppliers can successfully mix technologies to deliver cost-effective
superfast broadband in hard to reach areas.
• Smaller suppliers can bid for, win and deliver open public procurements at
competitive costs
➢ Eleven alternative suppliers have been contracted to deliver the 7 Market
Test Pilots and nine of the BDUK Superfast Broadband Phase 2 contracts.
• Communities can work together with suppliers to create viable commercial
conditions for small projects
• New partnerships have been fostered, including with other network providers.
➢ Janet, Network Rail Telecom and water contractors
Market Test Pilots: Interim Findings

20. Growth in non-BT projects
June 2013
Rural Community
Broadband Fund
(~£1m)
 Tove Valley
 Northmoor
(Gigaclear)
June 2014
7 x Market Test Pilots
(£8m)
 AB Internet
 Airwave
 Avanti
 CallFlow
 Cybermoor
 Quickline
 Satellite Internet
2015
Phase 2 Procurements
(£20m)
 Airband
 Callflow
 Cotswold (ITS)
 Gigaclear x3
 UK Broadband

21. But…
But…
• Take-up varies and is highly sensitive to awareness
(marketing) and demand stimulation
• Successes have not been uniform across all the Pilots
• To what extent can the flexibility be maintained at scale?

22. Next steps….
• Pull together all new information into a final lessons learned
report and share findings with suppliers, local bodies and
government policy teams
• Explore how to promote community funding options
• Explore commercial viability of fibre in hard to reach areas – e.g.
Janet, Network Rail Telecoms
• Work with suppliers about how to assist commercial rollout in
hard to reach areas by understanding barriers and promoting
examples of best practice

23. Questions?