Re-wiring the CountryDELIVERING 100% SUPERFAST BROADBAND

29th October 2014

Summary• 100% NGA is possible, and financeable

• How? New thinking required:• Co-investment/PPP• ‘100% down’• Trust the technology!

• Broadway Partners is your natural partner

Observation #1: The Problem is Everywhere!

• The so-called ‘final 10%’, or ‘no-build’ premises are not conveniently confined to rural areas …

… they are everywhere – scattered within towns as well as in deeply rural areas

• Therefore, fixing the ‘final 10%’ means potentially fixing far more

Observation #2: It’s Richly Complicated!

• First, the wider economic/societal benefits of 100% NGA are much greater than the consumer’s preparedness to pay

• Second, value-for-money is a critical issue

• Conclusion: a new model for partnership between Local Authorities and the private sector is needed

Observation #3: Fibre & Wireless Both Part of the Solution

2013 2014 2015 2016 2017 20180

20

40

Mobile offload to fibre Mobile on cellular

Exabytes per month

The Solution1. Co-investment/PPP• Aligns policy and commercial interests• More efficient project finance – EIB, municipal bonds, TIF• Shares the investment and returns,

while managing the risk• Positive signal to investors

2. Procure for ‘First 10%’• Guarantees 100%• New competitive dynamic

3. Trust the technology• Newbuild vs re-tread• Transformational effects

The tools are proven: this is not rocket science!

The WODC Social/Financial Contract

Since INCA’s May conference, we have….Agreed £1.6m Loan Note terms with West Oxfordshire

Received approval for £1.6m grant from Ed Vaizey, Digital Minister

Finalised the operating model

Put in place important strategic industrial partnerships

Refined Universal Service Commitment

Completed Public Consultation

Secured private investor funding

The pieces are coming together….

Financing Approach• Conventional wisdom says fibre is too expensive – wrong!

• The challenge (and opportunity) is to maximise the returns and to minimise the risk

• Maximise the returns:• Capture the non-financial benefits (externalities, multipliers, welfare etc.)• Eliminate costs, through commitment to scale

• Minimise the risk:• Use proven technology (make once, repeat often)• Work with world-class suppliers

• In practical terms:• Create efficient financing vehicles (project finance principles)• Access Government subsidy• Access Government borrowing capacity and rates• Access Infrastructure investors• Access Impact investors, via SSE and others• Access Bond markets, retail and institutional