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2008 BT has finally announced plans to roll out a fiber-based broadband network. This article looks at the cost and timescales for this deployment, the broadband speeds and type of network architecture planned, the regulatory issues surrounding this announcement and a wholesale business model. We shall look at each of these issues in turn.
The Cost & Timescales BT plans to spend £1.5 billion building a new fiber network. Around £1.0 billion is incremental to their existing expenditure plans for fiber deployment. The company expects its initial investment in the programme will result in £100 million of incremental capital expenditure in each of the 2008/09 and 2009/10 financial years. The remaining incremental spend of £800 million is being spread over the subsequent three years.The company plans to build this network and rollout this super-fast broadband to as many as 10 million homes by 2012. Broadband Speeds and Type of Network Architecture Planned The broadband speeds and network architecture planned will vary. For a fiber-to-the-premise (FTTP) scenario, the speeds that will be offered will be up to 100 Mbps. This will primarily focus on new build sites such as Ebbsfleet and the Olympics Village for the 2012 Games. BT plans to have 1 million FTTP connections available by 2012. For fiber-to-the-curb (FTTC) scenarios, the initial speeds being offered will be up to 40 Mbps, although BT is investigating technologies that can increase those speeds to more than 60 Mbps. For this type of architecture, BT plans to have 9 million FTTC connections available by 2012. Requirements for dedicated high bandwidth (100 Mbps or higher) are driving fiber deployments. Higher bandwidth can be achieved through a FTTP network architecture rather than a FTTC network architecture. This may see a migration towards a FTTP network architecture and an increase in the number of FTTP connections. In areas where fiber is not being rolled out, copper based ADSL2+ will deliver speeds up to 24 Mbps. This will predominantly be in more remote and less populated parts of the UK. Will this lead to a “digital divide” in the UK I hear you say? BT plans to work with Government and regional and local authorities on the rollout plans. Its aim is that “both urban and rural areas will benefit.” The company’s announcement goes on to say that “the precise deployment will depend on the engagement of Government and regional and local authorities.” Time will tell how realistic these aims are. Regulatory Issues There are some regulatory issues which remain unclear in light of BT’s announcement. BT has stated that this investment is dependent on the industry regulator OFCOM creating a “new regulatory framework”, which will result in a return on investment. “The funds required are extremely large and companies need confidence that risk-taking can be appropriately rewarded.” Further discussions and negotiations between OFCOM and BT are required to “iron out” these regulatory issues. Wholesale Business Model The plan for this fiber deployment is to have a wholesale market. Services will be made available “on an equivalent basis to all communication providers.” This means that Internet service providers such as Tiscali, Carphone Warehouse and BskyB will be able to utilise BT’s fiber network through wholesale agreements. Conclusions BT’s announcement is definitely a positive move and a step in right direction. Work still needs to be carried out in terms building the fiber network and addressing certain regulatory issues. Like Rome, the UK fiber network won’t be built in a day. However, this announcement from BT means that at least they’re off the block and the network should be built in a matter of years rather than eons
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