KCom bid to be big player in PSN market

The Hull-based group believes 30 to 70 regional public services networks (PSNs) could be required over the next three years, forming a rare pocket of buoyant public sector spending.

PSNs are shared private internets for use by the public sector, digitally linking thousands of workers. They aim to replace the current system of individual IT networks, cutting duplicate infrastructure and reducing buying costs.

KCom, which started life more than 100 years ago when Hull Corporation opened its first telephone exchange, has already won PSN contracts with Dorset and Staffordshire county councils.

“It’s a very big opportunity for us,” said Paul Simpson, KCom’s chief financial officer and chief executive of the group’s business services arm, also called Kcom.

“(But) if you miss the boat you could be locked out of local authorities for some time.”

KCom is up against bigger players including BT, Virgin and Cable and Wireless and has so far won two of its three contract bids.

It is waiting to learn the imminent outcome of bids for an East Midlands PSN and also Northern Grid for Learning, a broadband network linking councils in the North East.

Afshin Attari, head of public sector at Kcom, said because the company is a relatively new player in PSNs, it has “nothing to lose”.

“As a result of winning PSNs it gives us the ability to increase our market share,” he said. “We’ve got a lot of heritage in public sector so we’ve got the capability.”

The prize for KCom is significant: the Staffordshire PSN it won earlier this year is worth about £23m for a five-year contract, extendable to 10 years. Staffordshire County Council expects the network to save it more than £10m.

KCom executive chairman Bill Halbert said between 30 and 70 PSN contracts could be up for grabs over the next three years.

Mr Simpson said: “This is almost the perfect market for us. It would be somewhere where the bigger players will struggle; it’s inherently complex.

“Corporates do not have the incentive to spend. This is a lot more buoyant. We’ve put a much larger proportion of our resources into this market.”

The telecoms group last week held a round table event at the House of Commons to promote PSNs as councils and other bodies look to slash costs amid shrinking budgets. The event was hosted by Hull MPs Alan Johnson and Karl Turner.

Mr Simpson said big opportunities exist in Yorkshire, where it has already worked on South Yorkshire’s Digital Region project – a fibre broadband network to link homes, businesses and public sector bodies with average speeds of 25Mbps. It also owns and operates Hull’s telecoms network.

“Our objective is to respond to the aggregated requirements of Yorkshire,” he said. “We don’t know how big it’s going to be. It could be one of the largest in the country.”

But he admitted creating a PSN spanning the entire county, with its various and diverse local authorities, could be a big challenge.

“When you think about Yorkshire, with all its constituent parts, the bigger it is, the more complicated it is.”

Eight councils and four police authorities have so far signed up to join a fledgling Yorkshire and Humber Public Services Network. It aims to digitally link the region’s entire workforce of around 530,000 public sector workers.

“The real savings come later when you start to transform the way in which people work,” said Geoff Prowling, director of YHPSN. “We’ve got to take cost out of what we are doing; that’s the opening gambit.”

KCom admits organisations such as police can be wary over security concerns. But it said PSNs are built with high levels of security.

The Cabinet Office believes PSNs can save £500m nationally.

KCom said its PSN contracts allow organisations to leave and join at a later date, thus varying the price of the contract.

County Council led the way

STAFFORDSHIRE County Council launched one of the UK’s first public services networks earlier this year.

Initially the project, led by KCom, linked the county’s 200 council sites and 400 schools. It has now been extended to connect all borough and district councils in Staffordshire plus South Staffordshire Health Authority. “We expect, as a minimum that the PSN will save us £10m, but more importantly, by having a joint network in place for the public sector in Staffordshire, it’s much easier for us to provide end-to-end services to our residents,” said Sander Kristel, chief information officer at the council.