THE TRUE cost of rolling out fibre broadband to 5m homes in rural areas could dwarf the figures being discussed by Fujitsu, according to industry experts.
Analysts at RBS have placed the cost of providing fibre-to-the-premises (FTTP) to rural areas at around £4.5bn – far above the £1.5bn to £2bn projected by Fujitsu.
The Japanese hardware and IT services company says it will need to secure £500m of the £830m government funding earmarked for broadband rollout in order to hit the 5m homes target and will pump in between £1bn and £1.5bn of its own money.
However, industry sources say there is no guarantee Fujitsu will be able to secure the funding, for which it will face fierce competition from rivals when it is released in sections by the government.
The Japanese firm admitted the entire project will be unviable if a certain level of funding is not secured, but was unable to disclose the tipping point.
Sources at rival provider BT have accused Fujitsu of “smoke and mirrors” over its insistence BT should slash its wholesale prices for using its duct and pole infrastructure as part of the deal.
A Fujitsu spokesman told City A.M.: “We have seen several price estimates for the project but we have studied this in depth and think we have priced it right.”
Fujitsu is currently involved in a £700m legal action with the NHS over the failed project to electronically store the health records of millions of UK patients. A spokesman said this will not impact on the broadband project.