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January 29, 2016updated 30 Aug 2016 3:04pm

BT wins £100 million BBC contract from Vodafone

News: Cost-cutting and innovation are the key drivers.

By Alexander Sword

BBC has switched its broadcast network to BT to cut costs and enable digital innovation.

The new network will carry all of the broadcaster’s video, audio and data traffic, in addition to fixed line telephony, ISDN and broadband.

Coming into operation from April 2017, it will link all of the BBC’s UK sites, including its 21 broadcasting centres and local radio stations.

The more advanced network will add greater flexibility, with the ability to add extra services and capacity for major events such as a General Election of the Olympics. The BBC will also be able to work with and explore broadcasting formats which demand larger amounts of data, such as 4K or Ultra HD, as well as 360 degree content.

The contract is worth over £100m for seven years with an option for the BBC to extend for a further three. It is expected to save the BBC tens of millions of pounds.

The selection of BT Media and Broadcast followed a public procurement as part of the Aurora Programme, which is re-sourcing all of the BBC’s core technology services.

This marks a switch away from the BBC’s current provider, Vodafone, which provides the current network through the BBC’s provider Atos. Vodafone will still provide a key data centre, telephony services and additional connectivity in London, and will work with the BBC to switch onto the new network.

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Matthew Postgate, Chief Technology Officer at the BBC said: "This is an important step towards building an internet-fit BBC and will allow us to provide more interactive and personalised content in the future.

"At a time when the BBC faces serious financial challenges, it will also save us tens of millions of pounds so we can focus more of our money on the programmes and services for licence fee payers."

The BBC released a report on its charter review in September 2015, where it outlined plans to cut costs through creating more digital operations.

As Postgate indicates above, the BBC is cutting costs in the wake of significant cuts to the BBC’s budget in George Osborne’s ‘Emergency Budget’ in July. The BBC will now have to carry the cost of providing free television licences for those over 75, previously funded by the taxpayer, that will cost it £750m by 2020.

"We are going to save more than required by the Budget agreement, to innovate and make programmes for the whole country," the September report said.

"The BBC is currently undertaking a huge task of significantly reducing its costs in all areas," said Paolo Pescatore, Director at CCS Insight. "This includes content as underlined by the F1 highlights package which Channel 4 picked up as well as broadcast operations. But at the same time [it means placing] greater emphasis on digital distribution.

"This is of course a huge blow to Vodafone, but cost seems to be a clear driver of the switch. Regardless, more will be made out of the deal due to BT’s extensive network assets which will lead to further calls for functional separation of Openreach."

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