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BT ‘vastly overestimating’ rural broadband cost, report finds

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These sheep could soon trade roaming the field for surfing the web. Un-baaa-lievable...

MPs have lambasted BT for ‘vastly overestimating’ how much it would cost to bring broadband to Britain’s rural areas.

The comments follow a report from the National Audit Office, which found that an actual rural rollout would fall £92m (25 per cent) short of BT’s estimates.

Parliament now hopes that BT will use the spare capital to fund fast broadband to even more remote areas.

Unfortunately, BT doesn’t agree with the UK government that it purposefully bumped up the cost estimates, and described the Public Accounts Committee claims as ‘bizarre’.

Speaking to the BBC, Margaret Hodge, chair of the PAC, said: “Although it’s reassuring that the cost to the public purse could end up being £92m less than what BT had originally forecast in its bid, I worry that this does not stack up with what BT told my committee in 2013.”

“It is very concerning that it looks like BT could have abused its dominant position in the market by vastly overestimating forecast costs in the first place when it put in its original bid, and we also have broader concerns about whether the deal represents value for money.”

Related: BT rolling out 1Gbps G.fast broadband in 2016

BT, however, responded by explaining that its cost estimates were ‘based on our initial view of how much it would cost to deploy fibre in rural areas.”


“We have come in under budget in several areas which is good news for the taxpayer as we only charge for the costs we incur, not those we first forecast. The saings can now be reinvested to take fibre to additional areas.”

It added: “The suggestion we inflated those costs is bizarre as by doing so we would have hindered our changes of winning the work.”

Yojimbo

February 2, 2015, 11:44 am

How much were the competing bids and by whom?

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