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Can next-generation broadband infrastructure be used to deliver public sector managed networks?

In Analysys Mason’s experience, public sector organisations with a large number of schools and council sites in rural locations stand the greatest chance of reducing the cost of their managed bandwidth services by using next-generation broadband (NGB) infrastructure.

In the UK, many local authorities and devolved governments (hereafter referred to as public sector organisations) are funding the implementation of next-generation broadband (NGB) networks to improve the availability of superfast broadband services to consumers and businesses in areas that are not commercially viable, particularly rural areas. (Broadband Delivery UK has defined superfast broadband as having a speed of greater than 24Mbps.)

The same organisations are likely to have already invested in separate network infrastructure providing high-speed data and Internet connectivity or ‘managed bandwidth services’ to schools and council sites; some of these may be in rural locations. In this age of austerity, given their investment in NGB networks, could public sector organisations use the new NGB infrastructure to help provide their managed bandwidth services more cost effectively, as their existing managed service contracts become due for renewal?

Over time, NGB infrastructure will become available across the entire country. In Analysys Mason’s experience, public sector organisations with a large number of schools and council sites in rural locations stand the greatest chance of reducing the cost of their managed bandwidth services by using NGB infrastructure. This is due to the fact that NGB initiatives are primarily designed to increase broadband penetration in rural and low-population areas, and they receive state subsidies to reduce costs. However, before organisations make any changes in their provision of managed bandwidth services, they need to establish the suitability of the services that can be delivered using NGB infrastructure, in terms of value for money, timing and technical fit.

First, they should ensure that greater value for money can be achieved by using NGB infrastructure compared to continuing with or extending their existing contractual arrangements. According to a recent study of procurement options undertaken by Analysys Mason for a local authority, total cost savings in the region of 20% were required to justify a transition to NGB infrastructure for the delivery of managed bandwidth services. However, this analysis should be made on a case-by-case basis for each public sector organisation.

Assuming a move to alternative NGB infrastructure does deliver value for money, a more pragmatic consideration is that of timing and procurement strategy. NGB roll-outs are still in their infancy in the UK, and networks are not expected to be fully deployed until around 2015. Therefore, organisations whose contracts for managed services will be due for renewal soon should consider interim solutions to buy more time – for example, a contract extension or a re-procurement of the existing arrangement for a short contract period.

Organisations with contracts due for renewal after the expected NGB deployment date should plan their migration strategy, bearing in mind that penalties are likely to apply for early contract termination. The procurement should consider flexible delivery models that encourage service providers and systems integrators alike to ensure the services being offered represent value for money.

Public sector organisations also need to assess the technical capability of the services delivered using the NGB network. For example, is there sufficient resilience in the network to meet the organisation’s targets for service availability? Do the support arrangements meet the required service level and response times? Is there enough capacity within the network to cope with the public sector’s demands upon bandwidth? And finally, for those organisations that have signalled a commitment to the technical standards for the Public Services Network (PSN) being delivered by the UK Cabinet Office, what are implications upon the NGB infrastructure of making their managed bandwidth services compliant to PSN standards?

Analysys Mason has advised on some of the UK’s leading PSN initiatives and is supporting a number of local authorities in considering the options for PSN and NGB delivery. During all of these assignments, we have resolved many of the technical, financial and procurement issues being faced by public sector organisations.

Analysys Mason is highly respected in the industry for our leading-edge work on next-generation networks in both public and private sectors, and our analysis is widely acknowledged as being authoritative, independent, and robust. We have advised numerous public sector organisations, including the UK government, on NGB policy: this has included extensive cost modelling, cost-benefit analyses, options appraisals, state aid guidance and procurement support.