Openreach admits that improving internet in some of the most rural locations in Wales is not financially viable

Earlier this month Kim Mears the managing director of strategic infrastructure development for Openreach, a division of BT responsible for the rollout and upkeep of the UK’s broadband network, questioned the “value for money” in respect to improving internet speeds for some of the remote communities in parts of Wales. Speaking to the Welsh Affairs Committee he indicated that alternative technologies may have to be looked at.

BT and Openreach are required to act on requests to provide high-speed internet access to properties with download speeds of less than 10Mbits/s this agreement is covered by the Universal Service Obligation. Applicants are only required to contribute to the cost of an installation if it exceeds a cap of £3,400.

But Ms Mears explained to the Welsh Affairs Committee that in the most remote rural locations the cost of installation would far surpass the cap of £3,400 making the Universal Service Obligation unworkable.

"When you look at that final half, or one per cent, the cost to connect, there is a price point. £3,400. The cost to connect is way, way, way in excess of any of that. I genuinely believe that we need to look at either alternative technologies, or consider, and there is a value for money question, how much we're prepared to pay to connect the final half or one per cent."

Ms Mears comments follow on from an announcement by Virgin Media that has plans to roll out gigabit hyper-fast broadband services to hundreds of thousands of customers in Cardiff and some areas of South Wales. But ultimately Virgin Media will face the same challenge of reaching those most in need in the most remote and rural locations of Wales.

Richard Wainer BT’s policy and public affairs director told the Welsh Affairs Committee on Thursday that there were still around 50,000 homes in Wales without fixed line access to speeds of at least 10Mbit/s. Adding that around 18,000 of these homes were also outside of 4G coverage and providing a superfast broadband internet connection to these areas would be “prohibitively costly”.

"Yes, where we can get full fibre as the gold standard for connectivity, we should absolutely be pushing that. But there will be, inevitably, a small proportion of places where that simply is not going to be viable. Where other technologies can play a role, we should absolutely be exploring those."

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