Councillors asked to approve funding of new telecoms venture

Councillors are being asked to approve a budget of £150,000 for the establishment of an external organisation to help improve broadband services in the isles after consultants came to the conclusion that no private firm would be interested.

To be named Shetland Telecom, it would take ownership of the proposed link between Lerwick and the fibre optic cable that runs between Faroe and the Scottish mainland and passes Sandwick.

That project, which will cost up to £1.5 million to construct, will have to take its place on the council’s capital programme, although officials hope to be able to seek tenders by the summer of next year. External sources of funding will also be sought.

Initially, Shetland Telecom would not be able to supply high-speed broadband to homes, as that requires a network of fibre optic cables to homes, but it may be possible to create a series of “local exchanges”, perhaps in schools, leisure centres or care homes, from which wireless networks could be deployed.

The scheme was prompted by last year’s failure of the microwave telecoms link to Shetland operated by BT, which resulted in the closure of Sumburgh Airport and the loss of business for shops. BT has said it has no plans of its own to link in to the Faroese cable.

Thursday’s development committee meeting will be presented with a report from consultants Analysis Mason which recommends an external organisation as the most appropriate “model”. “This approach will allow SIC to maintain an element of control over future use of the infrastructure, while complying with EU guidelines for state aid,” the report states.

A separate report from the economic develoment unit suggests there will be a “continual need” for investment. “In order to fully address the ever-increasing demand for new digital services and to ensure that Shetland’s telecommunications infrastructure does not lag behind, there will be a continual need for future investment. Strategic investment may be required on a project by project basis in conjunction with industry and service users.”