Good news for rural communities in Scotland. A company installing an ultra-fast fibre broadband network across rural parts of Scotland has secured £50mn in new investment, BBC Scotland reported on August 14.
The investment aims to tackle the issue of “digital exclusion” in rural areas in parts of the Highlands and more remote parts of Scotland.
Highland Broadband has received £40mn from investment management firm AlphaReal and £10mn from the Scottish government-owned Scottish National Investment Bank to enable the roll-out.
Andy Clapp, executive director, Scottish National Investment Bank, said, “Our support of Highland Broadband’s multi-year effort to connect all parts of Scotland aligns with one of our core missions to increase equality through improving spaces. The installation of gigabit capable networks, which so many of us take for granted, is already having a real-world impact that’s strengthening the threads of Highland communities.”
Rural areas are about 18% less productive than the national average due to inferior broadband infrastructure. As such, the rural economy generates £260bn a year, but this productivity lag significantly reduces potential economic output. Poor connectivity restricts the ability of rural businesses to operate efficiently, stifling innovation, access to markets, and overall growth.
Funding digital internet roll-out
The company, which has bases in Edinburgh and Inverness, first started its work in the Lothians in 2015 before later expanding into the Highlands, Fife and around Stirling.
The new investment would help it to extend its reach to more than 150 towns and villages in the coming year.
Deputy First Minister Kate Forbes welcomed the funding. On a visit to Grantown-on-Spey, she said: “This is a significant success story for Scotland. The roll-out of Highland Broadband’s network has made a real difference to people and businesses in rural areas, supporting jobs and boosting economic growth.”
Earlier this year, the UK government said “digitally isolated” communities would be connected to fast, reliable broadband. It has been working with the Scottish government to roll out improvements across Scotland.
The £157mn contract with telecoms firm Openreach was awarded under the UK government’s Project Gigabit. Households and businesses in Skye, Islay, Tiree, Applecross, Durness were to be offered gigabit-capable broadband.
Digital exclusion in rural areas
UK telecoms minister Chris Bryant said: “Digital exclusion for people living and working in hard-to-reach areas across Scotland can be a huge obstacle to living a better and healthier life.”
Scottish business minister Richard Lochhead said: “This new contract brings even more investment to Scotland. We are committed to working with the UK Government and Openreach to drive efficiencies across both the R100 and Project Gigabit programmes and maximise gigabit coverage.”
Under Project Gigabit, the UK government aims to provide gigabit coverage across the UK by 2030.
A previous study by Lancaster University in 2022, notes that workplace-based annual earnings in predominantly urban areas of England (excluding London) are £25,400, while in rural areas they are £22,900—resulting in a difference of £2,500 a year. It is also worth noting that employment rates in urban areas are 3% higher than in rural areas.
Gavin Rogers, CEO, Highland Broadband, said “The Highlands and Islands face unique connectivity challenges, but we view overcoming these barriers as essential for providing what should be a basic service for everyone in Scotland. The bank’s continued support has enabled us to accelerate our plan to connect these regions, which ultimately helps reduce place based inequality in areas such as education, employment and healthcare,” Future Scotland reported
Prior to starting work in 2015, less than 1% of premises from Inverness to the north of Scotland, the Black Isle, and on the east coast had access to a gigabit-capable network. The company’s work has now improved to around 80% and expects to reach 98% coverage by the end of this year.
