Fujitsu £2bn broadband project throttled at both ends
Needs £500m from public purse, and for BT to get real with pricing
Fujitsu's plans to bring rural broadband to five million UK homes over the next three to five years could be seriously hamstrung not only over a row with BT about its prices, but also if it fails to secure £500m from the public purse.
The Japanese company confirmed a proposed joint venture yesterday with Virgin Media, TalkTalk, and Cisco to roll out 1Gbit/s fibre technology to five million homes in the UK.
Fujitsu said it was "willing" to invest between £1.5bn to £2bn in the project, but at the same time is relying on government funds of around £500m.
UK.gov has currently allocated £530m towards pumping "further private sector investment" into the delivery of faster internet access across Blighty via its Broadband Delivery UK (BDUK) vehicle.
In December last year, culture secretary Jeremy Hunt bagged £830m of public funds for broadband as part of a TV licence agreement with the BBC. The other £300m in the pot is yet to be allocated as it needs government approval.
So if BDUK does hand Fujitsu £500m for its joint venture with some of BT's ISP rivals, there will, at present, be just £30m left to dish out to other companies seeking funding for similar, but presumably much smaller-scale projects.
BT, which will finalise its contentious ducts and telegraph poles pricing structure for other ISPs in the summer, was quick to attack Fujitsu yesterday by questioning how much the company planned to spend of its own money.
"It is important that the companies concerned make it clear that they are willing to invest material sums rather than just spend public money in what could be a multi-billion [pound] project," said BT in a sloppy statement to The Register yesterday.
The telecoms giant failed to spot Fujitsu's declaration that it would invest up to £2bn in the project.
BT, which is spending up to £2.5bn to deliver its own fibre broadband network to two-thirds of UK premises by the end of 2015, also had a pop at Virgin Media about whether or not its rival would open up its infrastructure to all-comers in the broadband market.
"We are trying to find a solution to the delivery of quality broadband to the 'final third' – areas where there is no other infrastructure except BT's government-gifted ducts and poles," a Virgin Media spokesman told El Reg.
"It is disappointing BT has chosen to attempt to confuse the issue by talking about areas where there is already significant competition at the infrastructure and service provision levels."
Fujitsu, Virgin Media, TalkTalk and other companies in the broadband market recently complained in a letter to communications minister Ed Vaizey about BT's planned pricing structure that will provide access to the company's underground ducts and telegraph poles.
Despite communications watchdog Ofcom strong-arming BT into sharing access to some of its infrastructure with competitors who want to build their own faster broadband network, the whole plan could be hampered because, rivals say, the telecoms giant's costs are too high. ®