£146 Million To Upgrade Broadband in Highland and Islands

26th March 2013

The project, led by Highlands and Islands Enterprise (HIE) and delivered by BT, is being hailed as the UK’s most complex and challenging broadband project ever.

It means that around 84 per cent of Highlands and Islands homes and businesses will have access to fibre broadband by the end of the project.

Announced by Alex Paterson, HIE Chief Executive, at a contract signing with BT in Inverness the project is set to create a fibre network which will transform the area’s digital capabilities for decades to come.

Deputy First Minister Nicola Sturgeon said: “Our decision to invest over £126 million in this project demonstrates the confidence that we have in the economic future of the Highlands and Islands.

“Today's announcement signals the start of one of the most ambitious infrastructure projects in Scotland's history. It will connect communities across some of the most challenging landscapes in Europe and provides a platform for future economic development and regeneration.

"Next generation broadband enables businesses to compete on the international stage. It has the potential to transform the way in which we educate our children, provide health and social care and deliver our public services

“We congratulate Highlands and Islands Enterprise, BDUK and BT on the work that they have done to agree this contract and The Scottish Government will continue to work in partnership with them and local authorities across the region, to deliver real benefits to local people and businesses.”

The geography and disparate population of the Highlands and Islands present significant technological and cost challenges for the commercial rollout of broadband. Estimates have indicated that without public sector support fewer than one in four properties would have fibre broadband via commercial rollout.

Alex Paterson, Chief Executive of HIE, said: “This ambitious project is a game changer for the Highlands and Islands. It will roll out modern, fast and reliable broadband to areas that could not have hoped to have it introduced commercially.

“Digital connectivity is essential to today’s social and business activity. High-speed fibre broadband in the Highlands and Islands will make a real contribution to our communities’ prosperity, particularly for people in remote and rural areas.

“It offers opportunities for new ways of working, innovation, enhanced public services, access to international markets and provides the infrastructure needed by business sectors like energy, life sciences, tourism and business services.”

The public sector investment towards the contract is £126.4m. It is being delivered through the Scottish Government broadband fund, which incorporates funding from Broadband Delivery UK (BDUK), and also includes up to £12m from HIE’s own budget.

BT is investing an additional £19.4 million in the project, on top of its investment in its wider commercial roll-out for the region, taking the total project value to around £146 million.

BDUK is responsible for increasing access to broadband on behalf of the UK Coalition Government.

Communications Minister Ed Vaizey said: "The geography of the Highlands and Islands makes this project one of the most challenging in our nationwide roll out of broadband, and I'm delighted that today's announcement means that faster speeds and better access are now one step closer to becoming a reality for these communities. We do more business online than any other European country and this will be a tremendous boost for the local Highland and Islands economies."

The project is by far the most ambitious and challenging rural broadband rollout BT has undertaken anywhere in the UK. The company will build a fibre backbone with more than 800km of new fibre on land and install hundreds more kilometres of fibre access cable to hundreds of new street cabinets.

Engineers will also lay around 400km of subsea cables over 19 crossings to remote islands. It’s the biggest sub-sea engineering project BT has undertaken in the UK and is the first ever with so many seabed crossings.

Bill Murphy, BT Group’s Managing Director of Next Generation Broadband, said: “This is a once in a generation project which will deliver massive benefits not only to the local economy but also to local people of all ages. High-speed fibre broadband will improve the quality of public services, strengthen the competitiveness of the region’s businesses and protect and develop jobs.

“There are incredible obstacles to overcome, not least building a fibre network across some of the most rugged terrain in the UK. And we have huge distances to cover as we lay our cables over the hills and glens and under the sea. The unprecedented scale of this project is such that it can only be done in partnership and all of us in BT are looking forward to continuing the great working relationship that we’ve built up over many years with Highlands and Islands Enterprise.

“BT’s network will be open to all communications providers on an equal wholesale basis creating a competitive market where people aren’t stuck with one broadband provider and can choose the package and price that suits them.”

Deployment details for the first phase of this partnership will now be finalised and detailed plans for each local authority area will be announced in due course. Coverage levels in all seven local authority areas within the project area will represent a significant step change for fibre broadband in the Highlands and Islands.

BT expects to deploy widespread fibre to the cabinet, which offers broadband speeds of up to 80Mbps and some Fibre to the Premises. Ethernet, which can offer major cost and speed benefits for medium-sized businesses, will also become much more widely available as a result of the fibre build.

During the life of the project, BT and HIE will also be assessing new and emerging technology options through a £2.5 million Innovation Fund, with a view to extending faster broadband to the most remote places in the Highlands and Islands.

Local authority areas are – The Highland Council, The Moray Council, Orkney Islands Council, Shetland Islands Council, Comhairle nan Eilean Siar (Western Isles Council), Argyll and Bute Council and part of North Ayrshire Council (Arran and The Cumbraes).

Issued by HIE Communications
Lesley Gallagher, 01463 244244, 07912 093112

Scottish Government, Nicola MacNaughton, 0131 244 2670, 07825 905 987

BT Scotland Press Office on 0800 085 0660. All our news releases can be found at www.btplc.com/news

About HIE

Highlands and Islands Enterprise is the Scottish Government's economic and community development agency for the north and west of Scotland – a region which covers half of the country.

HIE pursues four priorities to support Scotland's economic recovery and deliver sustainable growth across the region:

Supporting businesses and social enterprises to shape and realise their growth aspirations.
Strengthening communities and fragile areas.
Developing growth sectors, particularly distinctive regional opportunities.
Creating the conditions for a competitive and low-carbon region.


About BT

BT is one of the world’s leading providers of communications services and solutions, serving customers in more than 170 countries. Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to its customers for use at home, at work and on the move; broadband and internet products and services and converged fixed/mobile products and services. BT consists principally of four lines of business: BT Global Services, BT Retail, BT Wholesale and Openreach.

In the year ended 31 March 2012, BT Group’s revenue was £18,897m with profit before taxation of £2,445m.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group plc and encompasses virtually all businesses and assets of the BT Group. BT Group plc is listed on stock exchanges in London and New York.