Geo Networks quits Broadband Delivery UK, criticising BT's prices

By Derek du Preez
16 Nov 2011 View Comments

Geo Networks has withdrawn from the Broadband Delivery UK (BDUK) framework, claiming access to BT's ducts and poles is too expensive.

Further reading

On the same day, BT announced that Fujitsu is the first communications provider to connect customers to a trial network using BT's ducts and poles, or PIA, infrastructure.

BDUK is the body responsible for distributing the £530m allocated to superfast broadband rollout by the government.

The BDUK framework lists suppliers, such as Geo Networks, that have been chosen to deliver broadband at a local level.

PIA allows network operators to connect to BT's infrastructure, where they can install sub-ducts in BT's ducts, or attach equipment on to BT's poles, in order to provide broadband in hard-to-reach areas without having to make huge capital investments in setting up their own infrastructure.

BT announced draft prices in January for what communication providers will have to pay for access to its infrastructure. In October it reduced those draft prices, following a backlash from network operators and information gained from ongoing trials. But this cut is not sufficient, according to Geo Networks.

Chris Smedley, CEO at Geo Networks, released a damning statement that argues BT's PIA prices are too high for smaller suppliers.

"While pricing may have reduced for the current PIA product (still not far enough in our view), the real issue is that it can only be used for providing the final drop from local exchange to a residential broadband consumer's house.

"PIA cannot be used for the far more costly task of crossing the long distances in rural areas to get to these remote communities – making the idea of being able to build new fibre connections within them faintly ludicrous. Quite simply, our business case does not stack up because of these restrictions," said Smedley.

"BT does not suffer from any of these restrictions when it has to assess the business case for deploying new optical fibre cable over its existing infrastructure. Only BT can deploy fibre for backhauling traffic long distances from local exchanges for itself and the wholesale ISP market. Only BT can build a business case including the revenues from the fast-growing mobile and wireless data market. Only BT can deploy services for businesses over this fibre," he added.

"These inadequacies of the current PIA product are fatal to infrastructure competition".

BT points to Fujitsu's live network as proof that its prices are fair.

"Geo's departure is disappointing but hardly a surprise given fibre deployment requires a high degree of commitment and expertise. It is ironic that Geo are trying to blame BT, Ofcom and BDUK for their withdrawal at the same time that the major players are making such good progress," said a BT spokesperson.

Meanwhile, Fujitsu is the first communication provider to connect customers through this process, and has done so using fibre-to-the-premises technology in the Wirral.

"Fujitsu UK has made strong progress to date using Openreach's poles and ducts... I'm delighted to announce that the first of our triallists is now live on our trial network," said Andy Stevenson, CEO Fujitsu Telecommunications Europe Limited.

"While there are still some points of detail we're working through ahead of commercial launch, we've been reassured by Openreach's collaborative approach towards pricing and product development, which gives us the confidence to move forward".

Fujitsu announced plans in April to build a fibre network that will reach five million rural homes over the next three to five years.

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