With the BDUK pilot projects announcing BT as the contract winner, and other local authorities announcing BT as the sole remaining bidder it is becoming clearer that the predictions from some quarters that the BDUK process is going to hand all the money to BT is becoming true.

We asked our readers over the course of a week four questions on the BDUK process and their opinion on BT winning the majority of the projects, and received over 1,100 responses. The main conclusion seems to be that while support for and against BT winning the projects is relatively evenly split, over two thirds support some investigation into the BDUK process and why so few bidders are actually in the race. The process started off with nine potential bidders, and resulted in two approved contractors, but Fujitsu through problems with other IT related .gov projects now appears to be blackballed with regards to other government work.

Opinions on whether the BDUK tender process should have an independent investigation.

A persistent theme for the BDUK process has been that it is hidden away with very little visibility to the public and that the performance of the various local authorities varies so much. Some authorities provide clear monthly updates and timelines for how things are progressing, whereas with some areas of the UK it is as if you were trying to find out information on a secret military operation.

What is your opinion on BT being the likely winner for most BDUK projects?

The split from when people were asked about their level of support for BT being the majority winner in the projects announced so far is interesting in that the pro and anti sides seem to be almost equally split. This suggests that many accept the need for something to be done to improve broadband even if it does perpetuate decades old monopoly systems in some parts of the UK, while others clearly oppose the idea of BT getting more public money. The big question that is unanswered for those who oppose BT getting the projects is who would be able to provide similar investment levels and have the ability to scale to deliver and meet the project goals.

Even though BT does seem to have some support with over one third backing them in the BDUK race, not all those who support them actually believe the firm will meet the 2015 targets. Part of this may be down to the delays over EU State Aid and that some local authorities have said so little publicly about the projects that residents are not even aware that there is money to be spent in their area.

Do you believe BT will be able to meet the targets already announced?

Perhaps part of the concern from the public in meeting the goals is that with the deadline under three years away, and Openreach suffering from backlogs of work due to the wet weather over the summer, people are currently being given telephone and broadband activation dates four or five weeks after they order the service. This carries the risk that the commercial two thirds of the UK may take longer to complete, and with many local area projects entering the build phase at the same time in 2013 and 2014 there may not be enough trained Openreach engineering staff to deliver.

The issue over trust and performance is not helped by the multitude of layers that Openreach is away from the average SME and consumer too. This means that frustration levels are growing as cabinet deployments constantly shift and for some areas of the UK they know the fibre tubing is in place for a full fibre (FTTP) deployment, but no actual fibre is installed in any of it. This later issue may be a mixture of skills shortage and the desire to make superfast services available to as many as possible, as quickly as possible.

Having an opinion is easy, and a lot of the time investigation reveals that a person’s opinion is based around what will serve their needs best. Taking this into account, the response to the above question is very enlightening, as while 60% live in urban cities and towns, the majority of people want broadband spending targeted to the areas where there is less choice and speeds on average are slower (e.g. broadband in rural areas has an average speed of 3.5 Mbps compared to 10.5Mbps in the urban areas). Some 27.6% of respondents support the current model of spending that is seeing some £830m of central Government money spent on the final third, and a good number of cities.

The big surprise is the number that support the idea of a demand led scheme for investing the money. With the old BT Wholesale demand scheme in the end just being used to provide a roll-out schedule, and local authorities having already run demand schemes we would have expected to see a lot less interest in effectively another survey. The advantage to a demand led scheme is that assuming the vocal complainers are also those most likely to sign up to a newly rolled out service then the chances of funding creating a white elephant network that no-one uses are less likely.

The key thing now is for the Government and BDUK staff to ensure that the blanket EU State Aid approval does go through. There are sticking points which mainly appear to revolve around the lack of dark fibre access in the projects, but it is probably fair to say that 99.9% of the public and SME market care little for the deliver method, they just want better broadband available from the names they know and at a price that is the same as they pay now or only fractionally more expensive.

As we launch our first broadband factsheet today, I thought it would be a good opportunity to look at the market shares of the largest operators.

One of the purposes of the factsheet is to let people see the trends in the relative market shares and understand how providers are doing. We’ve included data over the last couple of years for the major providers:

BT seems to be performing strongly adding almost a million new users between September 2010 and March 2012 with only Sky showing a similar level of growth. Most users are likely to be making decisions based on bundled prices (something we hope to get more information on our broadband survey).

We are about to see a technology gap developing between BT’s investment in fibre-optic broadband and some of the other operators (Virgin Media being a notable exception). Over the last few years these operators have been building extensive Local Loop Unbundled (LLU) networks which has given them an edge over BT services as they’ve been able to provide faster services at lower costs. Without the same investment in fibre, BT is likely to strengthen its position.

It’s important to note that the BT numbers shown on this graphic are BT Retail numbers, however the lack of significant sub-loop fibre investment by the current ‘LLU operators’ (i.e. everyone other than BT and Virgin Media) means that other operators will lose one of the advantages over BT Retail.

The fibre services from BT are available via Openreach at a wholesale level, but not with the same degree of control that LLU operators currently have from running the active hardware. The volume of sales for TalkTalk and Sky fibre services is down in the 5,000 to 10,000 versus the over 500,000 of BT Retail. How TalkTalk and Sky market their fibre products will be crucial to competing with BT Retail, the traditional method of being cheaper than BT will be difficult to achieve.

It shall be interesting to see how these numbers develop over the second half of 2012. With the significant difference in user bases, Orange and O2/BE are going to find it more difficult to get the same economies of scale, although both may be able to take advantage of their mobile networks and offer integrated fixed/mobile broadband packages to protect their position.