Digital Region broadband project set to receive public bailout

Monday, April 2nd 2012

Much-maligned broadband initiative Digital Region has been awarded another £10 million of money from the public purse.

Digital Region broadband project set to receive public bailout

South Yorkshire super-fast broadband network operator Digital Region is set to receive around £10 million of public money to prop it up as it struggles to turn a profit.

The project lost £9.2 million in the 2010-11 financial year due to high operating costs and earnings of just £167,000, and has already received approximately £100 million of taxpayers' money to prevent it from financial collapse.

Doncaster, Rotherham, Barnsley and Sheffield councils each hold shares in the operation, as does the government, which acquired shares owned by the soon-to-close regional development agency Yorkshire Forward.

According to the Yorkshire Post, each of the local authorities now has little option but to plough more money into the initiative and seek out a private sector telecoms partner to take over the management of the broadband network.

If the plan goes ahead, the likes of BT and Virgin Media will be brought in to run Digital Region and be paid for doing so, although the organisation would remain in public ownership for at least the short term.

David Cowell, chief operating officer at Digital Region Ltd (DRL), said the project has so far meant that eight in ten homes and businesses across South Yorkshire can connect to super-fast broadband.

"The project is pioneering and it has helped place South Yorkshire at the forefront of the UK's digital agenda. Thanks to our current delivery partner Thales, the build phase has been successfully completed to time and cost," he remarked.

"DRL is delighted to move forward with the continued support of both the board and the central government and local authority shareholders."

Digital Region has struggled after failing to attract a major internet service provider (ISP) to take advantage of its wholesale super-fast broadband proposition.

Only smaller ISPs have signed up for the project, with Little Big One last year becoming the first partner to offer a package comprising broadband, landline and TV services.

Digital Region broadband project set to receive public bailout

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