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The changing face of broadband: New FttP infrastructures for Ultra–Fast

Ben Allwright, CEO
30.07.2017

It seems that Fibre-to-the-Premise is finally coming and with just 3% UK coverage today, there’s much to do…

All change at Openreach

With Openreach separating from BT it recently announced a consultation for a shared access, full-fibre, wholesale network to 10 million UK premises. This could offer Communication Providers (CP’s) a rapid and cost-effective way to deliver Ultra-Fast to consumers. We expect Openreach’s largest customers, such as Sky, TalkTalk and BT Retail, to be fully behind a FttP Wholesale/Retail play, as it broadly replicates the copper-based model in place today; the retailers competing largely on brand, bundling and price. And on the surface it makes good sense too, potentially avoiding multiple, overlapping FttP investments.

In parallel, Openreach continues to advance its plans to enhance its FttC UK coverage and broadband speeds by deploying G.Fast technology alongside vDSL, to 10 million more UK premises. That means that for those within a few 100m of the electronics, speeds of 350-500Mbts/s could be achievable, although the majority – who will be further away – may still expect to receive a sub-100Mbts/s service for some time to come.

More UK coverage for Virgin Media

Openreach’s largest fixed-line competitor, Virgin Media, has ‘pressed pause’ on its Project Lightning ~750K homes through its plan to add 4 million new premises passed. Expected to recover against its well-publicised early deployment challenges, VM is still targeting to deliver >300Mbit/s Cable services to two thirds of the UK. Its new infrastructure being predominately FttH, alongside further DOCSIS upgrades for HFC.

UK Coverage

The rise of the Alt-Nets

Underpinned, in part, by government funding, the ‘Alt-Nets’ are gaining momentum too, building bespoke FttP networks as both wholesaler and retailer. Alt-Nets can, therefore, differentiate their offerings more readily, in terms of capability, performance and price, enabling them to attract/retain greater market share and mitigate price erosion. And with build costs falling, due to various Ofcom interventions and construction innovations, their case is getting stronger still.

CityFibre recently announced a further £200 million of investment to expand its ‘Well Planned City’ infrastructure across 5-10 additional UK towns and cities, holding firm to its longer-term FttP commitments for UK coverage.

Gigaclear has raised a further £111 million in equity funding and BDUK monies to build more FttP networks, focusing on the poorly served, more rural areas of Britain.

TalkTalk’s Ultra Fibre Optics (UFO) Infrastructure is expected to grow within, and then beyond, its existing FttP footprint in York too.

Changing legislation

Ofcom continues to progress bold legislatory interventions to accelerate FttP investment, shaping an Openreach Physical Infrastructure Access (PIA) product through its Ducts and Poles Access Remedies. Through this emergent service offering, due in full in late 2018, CP’s will be able to lease physical space within, and on, BT’s underground duct and overhead pole network infrastructure; substantially reducing the high costs, challenges and slowness associated with traditional civils construction.

The impacts of the PIA remedy could be profound for Alt-Net FttP deployments and are, perhaps, the main underlying motivations for Openreach to push ahead with a wholesale access network consultation. Some are predicting a ‘land grab’ in targeted urban and sub-urban areas.

PIA will also appeal to Mobile operators, as they seek to lower operating costs by driving ‘owned’ fibre back-haul to their cell and micro cell sites (for 4G, and in readiness for 5G).

A further piece of regulatory intervention is the earlier introduction, by mid-September 2017, of Openreach’s Dark Fibre Access (DFA) product. For specific end-product applications it may offer shorter-term advantages to CP’s over PIA. However, based on the pricing of the two options, we believe that PIA will represent a lower cost option in the longer term for residential FttP applications.

Government funding

Combine these many developments with the new £400 million Digital Infrastructure Investment Fund (DIIF) announced by the UK Government that provides a 100% business rates relief incentive, and you can see multiple catalysts for Alt-Nets and early movers.

Strategic choices

This conflict then, between the ‘co-opetition’ (wholesale/retail) model and the pure competition approaches, looks set to rumble on for some time. Openreach’s case for committing to a risky, major UK-wide build – thus mitigating some of the messy business of opening up its networks via PIA – is considerably weakened by the appetite and capability for self-build, which the government is readily supporting for UK coverage through both financial and legislative interventions.

Commercial viability

Ubiquitous video content and cloud-based applications are today’s main drivers for the adoption of Ultra-Fast, as it transitions into a ‘must-have’ utility. Demand will continue to rise, with Smart Cities, IoT, Tele-medicine, Autonomous Vehicles, etc. all making their way into the mainstream over the next decade, radically and forever changing the Ultra-Fast demand landscape.

The Alt-Nets should be commended for seizing the opportunity to do something bold, creative and adventurous. The most successful will work in partnership with the local communities, satisfying bespoke needs and driving an increase in the public perception of fibre’s utility.

However, with such big investments required, the government needs to avoid stimulating overlapping and conflicting competition, which could undermine their individual viability.

UK Coverage

Implementation challenges

The implementation scale and complexity of FttP is considerable irrespective of the approaches taken, perhaps best likened to the national railway-building endeavours of the Victorians.

With CP numbers rising and deployments accelerating, we foresee growing pressure on civil engineering companies and their scarce human resources. This may result in significant implementation bottlenecks and rising build prices.

CP’s looking to mitigate build risks and complexity may turn to the largest engineering services companies and engage them via ‘turnkey’ projects, but they should expect to pay a material premium.

Partnerships for success

Establishing efficient and resilient supply chains will be of paramount importance.

CP’s need to continue their steely determination to drive down the build costs. Not only selecting the right deployment strategies and architectures, but leveraging the latest build approaches and matching these with lean, effective deployment process. For instance, by addressing the acquisition of wayleave consents from the outset, to maximise build yield.

To help CP’s on that journey, the choice of expert network engineering partner is essential. Those with the right scale, experience and innovation, and a full understanding of the various deployment approaches, including the latest Openreach PIA & DFA product offerings.

Critically, those partners should bring intelligent analysis, smart processes and planning automation to ensure that real savings are made across all activities inherent in selecting, then building and operating, an Ultra-Fast Network and Service Platform.

Despite an exciting array of questions yet to be answered and challenges yet to be overcome, the paths towards a brighter digital future are surely emerging for the UK.

This article was originally published on LinkedIN. Click here to read the comments.