Vodafone UK enters the 5G FWA fracas

Vodafone UK has debuted its 5G Gigacube to further expand its connectivity portfolio, perhaps gaining more of a foothold in the broadband market.

Although Vodafone is primarily associated with the mobile segment in the UK, it has been making positive moves in the broadband market over the last twelve months. Having signed a partnership with CityFibre last year to deliver fibre broadband services, the 5G Gigacube offers another twist to the portfolio.

Vodafone claims the 5G Gigacube can offers speeds of up-to 1 Gbps, the dreaded conditional statement which been suggested to mislead customers, while 64 devices can be connected simultaneously, and the range can be as great as 90 metres. There are still a lot of unknowns and nuanced language in these statements, but it does seem to be priced competitively as you can see below:

Data allowance 100 GB 200 GB Unlimited
12-month contract £25 (£83 upfront) £33.33 (£42 upfront) £41.67 (£42 upfront)
30-day contract £25 (£271 upfront) £33.33 (£271 upfront) £41.67 (£271 upfront)

Interestingly enough, there have also been some clues into the way in which it will be marketed.

Due to the offering being mobile by nature, there aren’t geographical limitations, in theory. If you are a small business without a fixed office, the plug and play feature allows you to effectively carry connectivity wherever you are. This could be applied to a variety of situations, such a pop-up restaurants or bars, and could potentially open-up new markets for broadband products.

It also tackles another interesting challenge in the consumer broadband market. When a customer moves home, there is no guarantee that customer will be retained; it depends on offers which are available wherever that customers actually moves to. With a plug and play, mobile driven, broadband solution, contracts can be retained irrelevant as to where the customer lives.

Although we have been teased with the launch of the 5G Gigacube over the last couple of weeks, its debut today completes the puzzle when it comes to convergence.

Convergence is one of the most consistent buzzwords over the last couple of years, but that is for a very good reason. Not only are convergent customers more likely to be retained year-on-year, it increases the profitability of subscriptions. Most telcos would rather have one million customers taking two services than two million taking one, and this product offers Vodafone another opportunity to make the most of the buzz.

Announced earlier this month, as the telco switched on its 5G networks, Vodafone will offer a convergence connectivity product, combining a home wifi solution with mobile for £50 a month. And to sweeten the deal, customers will also receive an Amazon Alexa speaker for free.

Vodafone has largely been viewed as an ‘also-ran’ over the last decade, O2 and EE have built a considerable leadership position, though the former-market leader has been rebuilding over the last few years.

The turnaround in the business does seem to coincide with the introduction of Vodafone UK CEO Nick Jeffery. During his tenure, the team has built a converged network, Redstream, addressed customer service with the introduction of chatbots, the retirement of legacy IT systems, reinvigorating the brand and creating a business which is contextually relevant. Although this is not mission complete, you can see the progress which has been made.

Vodafone feels like a new business at the moment and it couldn’t have happened at a better time. The world is about to enter into a new era of connectivity with 5G and FWA challenging traditional home broadband. Vodafone is positioning itself very well.

Amazon takes one small step for satellite connectivity

Amazon has submitted its application to the FCC to deliver home broadband services to rural communities in the US through its Kuiper Systems satellite programme.

In a filing with the FCC, Kuiper Systems, a wholly-owned subsidiary of Amazon.com, plans to deliver high-speed, low-latency broadband services to consumers, businesses, and other customers worldwide through a constellation of 3,236 satellites in 98 orbital planes at altitudes of 590 km, 610 km, and 630 km, us Ka-band radio frequencies.

Aside from providing broadband solutions to rural and hard-to-reach communities, the plan is also to enable MNOs to expand wireless services to unserved and underserved mobile customers and provide high-throughput mobile broadband connectivity services for aircraft, maritime vessels, and land vehicles.

While Amazon has plugged its bank account to entice the FCC, it is also leaning on its existing operations as a means to support the new venture. It has stated it has the ‘global terrestrial networking and compute infrastructure required for the Kuiper System’, as well as the ‘customer operations capabilities’ acquired through its various businesses from eCommerce through to AWS cloud computing.

It’s a comprehensive filing from Amazon, and we suspect it peak some interest at the offices of the FCC.

“The Kuiper System will deliver satellite broadband communications services to tens of millions of unserved and underserved consumers and businesses in the United States and around the globe,” the application states.

“According to the FCC’s 2019 Broadband Deployment Report, 21.3 million Americans lack access to fixed terrestrial broadband with benchmark download and upload speeds of 25 Mbps/3 Mbps, and more than 33 million Americans do not have access to mobile LTE broadband speeds of 10 Mbps/3 Mbps. Amazon will help close this digital divide by offering fixed broadband communications services to rural and hard-to-reach areas.”

Once the ugly duckling of the communications family, the satellite segment has been given a new lease of life in recent months. Amazon and Tesla are two companies which are attracting the lion’s share of headlines, but there are several firms, such as OneWeb, Telesat and LeoSat Technologies, with grand plans to launch constellations over the next few years to bridge the connectivity gap.

And it isn’t just satellites which might be filling the skies over the next few years. Google’s Loon is another business attempting to break the mould when it comes to connectivity. Last week, Google finally received the relevant permissions to start testing its balloons to deliver connectivity, with commercial services set to launch over the coming months.

Even internally the telco industry is seeking to disrupt the status quo. Fixed wireless access for broadband solutions are becoming increasingly popular as a means to deliver connectivity over ‘the last mile’. AT&T and Verizon are charging ahead in the US, with companies like Starry challenging, while numerous telcos have announced their own ambitions in Europe, including Vodafone and Three in the UK.

Although there are still ambitions to deliver the full-fibre dream, the commercial realities seem to be getting in the way. It is incredibly expensive to deliver home broadband through wires, especially when you go to regions such as the US, where the geography is so diverse and vast, or Africa, where ARPU remains a problem in justifying ROI. The digital divide is present everywhere, to varying extremes, and it seems the traditional approach to home broadband is not going to be able to meet demands.

That said, some territories are even out of the reach of Bezos. In the application, Amazon has requested a waiver from delivering connectivity to Alaska, as it would be too far north for the constellation. It perhaps undermines the validation Amazon has put forward, delivering connectivity where it is too difficult for others, though whether this has any material impact remains to be seen.

Although progress is clearly being made here, what is absent from the application are any details on the design of the satellites or timetables for launches. Should permission be granted, we suspect Amazon would move forward very quickly however, Bezos is a space-buff after all.

Interestingly enough, Bezos’ side venture Blue Origin could be in the running to launch the satellites, though Amazon would have to be very careful here. As a publicly-traded company, this could be viewed as a conflict of interest.

The OTTs have constantly been a threat to the delivery of connectivity, a segment owned by the telcos to date, and have faced numerous complications is staging a coup (see Google Fiber). Using satellites might just be a way to carve a niche. It will be an expensive job, but these are companies which have the funds, the desire and the culture to make such a dream a reality.

OTTs Telcos
Cash Cash rich organizations, with incredibly profitable core business models to fuel expansion Incredibly constrained thanks to disruptions to profit-machines such as voice and SMS. Already committed to expensive business of traditional connectivity leaving limited funds for cash-intensive R&D outside bread and butter operations
Desire Constantly searching for new ideas to fuel growth on the spreadsheets. Expectations are high with shareholders and core models will slow down at some point. Do not have the same limitations placed on them (legacy business models and technologies) as the telcos Seem to be fighting too many short-term fires to cast an eye on the horizon. 5G and fibre are taking up so much attention, there seems to be little desire to disrupt themselves. Focusing on protecting what they have
Culture Cultivated a culture of exploration and fail-fast. Willing to fuel ideas without immediate commercial gains if there is potential for profits. More of a big-picture mentality to business Traditional businesses, with traditional leadership and traditional employees. Rarely search beyond the norm for profitability

Average UK broadband speed up 18% – Ofcom

UK telecoms regulator Ofcom has published its annual communications market report and it reveals a healthy increase in broadband speeds.

Over the course of 2018 2.2 million people upgraded to ‘superfast’ (at least 30 Mbps) broadband, taking the total to 15.6 million connections out of a grand broadband total of 26.6 million. This resulted in the average residential download speed increasing by 18% to 54.2 Mbps, more than double the figure claimed by cable.co.uk earlier this week.

Apparently fibre-to-the-cabinet overtook full ADSL for the first time last year and we managed a whopping 500,000 full fibre connections, which was almost double the 2017 total. We’re told that 7% of UK premises had access to full fibre by the end of 2018, compared to just 3% a year earlier.

All this super-duper speed inevitably led to increased consumption, with average data use per fixed broadband line increasing by 26% to 240GB per month and average monthly use per mobile data connection increasing by 25% to 2.9GB. Equally unsurprising is the revelation that this is mainly driven by video streaming.

“A major factor behind this growth is the increasing popularity of TV streaming services such as Netflix and Amazon Prime, which is making traditional broadcast TV increasingly irrelevant and could eventually lead to it becoming entirely obsolete,” said Alex Tofts of Broadband Genie. “But these services, especially if viewed in 4K, can be data intensive and require a reasonably fast and, ideally, unlimited connection.”

Broadband Genie is a price comparison service, as is Cable.co.uk, so they have a commercial interest in people being dissatisfied with their existing service. Presumably anyone finding their fixed broadband inadequate for 4K streaming is already in the process of upgrading, or just settling for boring old HD. Anyone trying to stream 4K to their phone needs to ask themselves why.

Orange gears up for the Tour de France but no mention of 5G

This weekend will see the Tour de France begin in Belgium and while it might be a chance for some to enjoy a tipple in the sun, for Orange it is a monstrous task. But it does seem to have forgotten to plug 5G.

Delivering a connectivity solution for this spectacle is somewhat of a difficult task. The race covers 3,460km over 21 stages, starting in Brussels, winding through 219 municipalities in France before ending in Paris. Four stages will be held in the Pyrenees and another four in the Alps, while numerous see the race snake through rural France. These are not necessarily the easiest environments to provide connectivity in.

The other factor you have to take into account is this is not necessarily a ‘build once’ concept for network infrastructure; the tour route changes every year, making permanent infrastructure redundant in numerous areas. That said, it does provide the commercial drive to bridge the digital divide in some rural environments.

In some places, it makes just as much commercial sense to rollout permanent infrastructure to the small towns as it does to make it temporary in the more secluded areas. This year, 11 locations will benefit from a permanent fibre installation, while 37 municipalities visited by the Tour and 182 municipalities located within 10km of race will also benefit from 4G upgrades.

This is not to say Orange should wait for the Tour de France to pass through a village to address the digital divide, but it is a nice by-product for some communities.

One massive omission from any of the materials is 5G. With 5G buzzing in almost every corner of the connectivity world, it would be a fair assumption it would be here as well. In other sponsorship properties Orange owns, Roland Garros for example, 5G has been the focal point of communications, but it has been missed out here.

Admittedly, this is a different and more complicated environment to deliver the super-fast ‘G’, but it does seem to an oversight; there are various different usecases which could be plugged by the telco here. This is not to say Orange should wait for the Tour de France to pass through a village to address the digital divide, but it is a nice by-product for some communities.

In 2017, we had a behind-the-scenes tour of the event, with Orange offering some insight into the efforts made to deliver connectivity. And its not as easy as it sounds. Alongside the Orange technical team which has to move with every stage of the tour, the telco has to provide connectivity for roughly 120 trucks housing various broadcasters, shifting 20km of fibre and 65km of power cables each day.

The figures quoted above were accurate two years ago, now you have to take into account consumers are more digitally defined, using a broader range of apps and digesting more data on a daily basis. Here’s a bit of a taste of the complications Orange faces this year:

  • 7,000 hours broadcast by 190 countries worldwide
  • 10 to 12 million spectators on the roadside
  • 8 million unique visitors to the website
  • 32 km of cables deployed at the finish line during the event
  • 350 temporary phone lines
  • 32 mobile 3G/4G mobile relays to strengthen mobile network coverage
  • 250 km of specifically deployed optical cables

In the ‘village’ at each stage of the Tour, Orange has said it will deploy eight separate wifi networks, with an equivalent rate of 200 Mbps and able to handle more than 10,000 simultaneous connections. This is the easy part, the village doesn’t move all day, but providing continuous connectivity while the race is progressing is a different challenge.

This is a marketing opportunity for Orange, it gets to show how wonderful it is at solving complicated problems, but there is certainly an upside for some in the rural communities who could see a connectivity boost. Assuming the race passes through your quaint village of course.

UK broadband slower than Madagascar and Malaysia

Price comparison site Cable.co.uk has released its latest data for worldwide broadband speeds and it doesn’t paint a flattering picture about the UK.

According to the data gathered by M-lab the UK is 35th in the world when it comes to average broadband download speed. Our 22 Mbps average puts us just behind Madagascar, while Malaysian punters can reasonably expect speeds in the region of 24 Mbps. Winner for the past two years – Singapore – has been relegated into second place by Taiwan, which somehow managed to increase its average download speed from 28 to 85 Mbps.

Coming in at number three is Jersey, which the report chose to isolate despite it not being a country. The reason for this is presumably to illustrate what a big difference fibre makes because Jersey, we’re told, is the first ‘jurisdiction’ to offer ubiquitous FTTP. It’s in Cable.co.uk’s interest for people to feel dissatisfied with their current broadband offering and seeing how much better they have it in Jersey may contribute to such sentiment.

“It’s been very interesting looking at the data for a third year running,” said Cable.co.uk’s Dan Howdle. “It’s our largest data set ever, and the results are reassuringly consistent. The obvious correlation is that countries and territories with a heavier reliance on or ongoing investment in pure fibre (FTTP) networks, or are upgrading to fibre or LTE from even more aged technologies, continue to see their averages rise.”

This is presumably behind Taiwan’s meteoric rise, but it doesn’t explain why some of these reassuringly consistent numbers are going in the opposite direction with similar rapidity. Romania, for example, averaged 21 Mbps in 2017, jumped to 39 Mbps last year but has now fallen back to its 2017 levels. Norway, Belgium and Hungary also went into reverse between 2018 and 2019, implying Europe is having some issues.

The bottom of the list is dominated by Africa and what the report describes as ‘Arab States’, which includes most of the Middle East and North Africa. The global average is now 11 Mbps, up from 9 Mbps last year, but this seems to be almost entirely driven by developed countries switching to fibre.

Europe gives Ofcom the greenlight for Dark Fibre plans

Having published new rules on Dark Fibre and ‘ducts and poles’ access in May, Ofcom has made no material changes following a review from the European Commission.

The rules are another attempt by Ofcom to encourage more competition in the fixed market and therefore increase investments made by the telcos in offering services in regions which could be deemed as less commercially attractive. Openreach might not be the happiest for the situation, but it is a step towards shortening the digital divide which has emerged in the UK.

Starting with the ducts and poles element, Ofcom has confirmed telcos laying fibre cables for broadband and mobile networks will benefit from greater access to Openreach’s existing infrastructure. The watchdog has used the phrase ‘unrestricted’ though we struggle to believe there are no loop-holes for Openreach to play around with.

This is not necessarily new from Ofcom, but it is an extension of rules which were passed last year. To this point, Openreach had been compelled into opening up access to the infrastructure for competitors serving residential customers and small businesses, though this update extends the rules to large businesses as well.

With enterprise services plugged as the biggest gain for telcos during the 5G era, the greater access to infrastructure competitor telcos have, the more attractive the business case will be for investment and therefore creating innovative services for the verticals. That said, Openreach will not be as happy as others.

This is a former-monopoly which has reaped the benefits of being the dominant player in the market. Employees will be tasked on protecting and profiting as greatly as possible from assets, though if the regulator keeps opening up infrastructure, this becomes more difficult.

The second area worth noting from this ratification from the European Commission addresses Dark Fibre across the country. This is an area Openreach has fought bitterly against though it seems it could only hold back the tide for so long.

The new rules will force Openreach to offer Dark Fibre as a product to other telcos in areas there are no rival networks present at Openreach’s exchanges. These are the areas where Openreach has a continued monopoly thanks to prior public investment and there is a risk of damaging the business case for competitors.

Under the new rules, in these areas where competition is unlikely to emerge organically, ‘dark fibre’ can now be ‘lit’ by competitors with their own equipment. Openreach will be required to give competitors physical access to its fibre-optic cables, at a price that reflects the cost of laying the infrastructure. In areas where there is competition, pricing regulations will be lighter.

Although these new rules are unlikely to be the most profitable for Openreach, there will be plenty of happy faces around the UK. Telcos have been complaining about the regulatory barriers to achieving the perfect 5G/fibre dream the Government has dreamt up, and this is one step in the right direction.

Virgin Media to take a mmWave approach to ‘full-fibre’

Virgin Media has unveiled the results of a new trial using wireless to deliver fibre broadband to customers in remote locations.

In a small village in the English countryside, Virgin Media has been exploring possibilities of delivering backhaul traffic over the airways. Although this is something which Virgin Media has been doing for years, the difference here seems to be the team is toying around with mmWave as opposed to microwave.

“As we invest to expand our ultrafast network we’re always looking at new, innovative ways to make build more efficient and connect premises that might currently be out of reach,” said Jeanie York, Chief Technology and Information Officer at Virgin Media. “While presently this is a trial, it’s clear that this technology could help to provide more people and businesses with the better broadband they deserve.”

The challenge which seems to be addressed here is combining the complications of deploying infrastructure and the increasing data appetite of the consumer. As you can see below, the trial makes use of mmWave to connect two ‘trunk’ points over 3 kilometres with a 10 Gbps signal. The signal is converted at the cabinet, before being sent through the last-mile on a fibre connection.

Virgin Media

Although this trial only connected 12 homes in the village of Newbury, Virgin Media believes this process could sustainably support delivery of residential services to 500 homes. This assumption also factors in a 40% average annual growth in data consumption. With further upgrades, the radio link could theoretically support a 20Gbps connection, taking the number of homes serviced to 2,000.

The advantage of this approach to delivering broadband is the ability to skip over tricky physical limitations. There are numerous villages which are experiencing poor connections because the vast spend which would have to be made to circumnavigate a valley, rivers or train lines. This approach not only speeds up the deployment, it simplifies it and makes it cheaper.

Looking at the distance between the two ‘trunks’, Virgin Media has said 3km is just about as far as it can go with mmWave. This range takes into account different weather conditions, the trial included some adverse conditions such as 80mph winds and 30mm rainfall, but radios chained together and used back-to-back could increased this coverage and scope of applications.

With alt-nets becoming increasingly common throughout the UK, new ideas to make use of mmWave and alternative technologies will need to be sought. Traditional players will find revenues being gradually eroded if a new vision of connectivity is not acquired. Just look at the challenge CityFibre has been mounting to the status quo as evidence of the threat.

Industry says Government should focus on outcomes not specific tech

Being forward looking is an excellent quality to have in a national government, but when objectives are focused on technology not the desired outcome, it is a risky approach.

In this instance, it seems the UK Government can do nothing right. For years, the focus of the fixed industry was G.Fast not fibre, believing that the connectivity half-way house was a sensible strategy. There might have been adequate arguments made at the time, but with hindsight they do seem underwhelming.

Now the position is to drive towards a full-fibre, connected nation, with targets to connect every household with the future-proofed lines by 2033. However, some are now questioning whether this is an over-correction.

The issue seems to be that the UK Government is focused on technology, not delivering the desired outcome.

“We will cover the overwhelming majority of the UK with fibre, but there are also other technology developments which will contribute to a connected Britain,” said Clive Selley, CEO at Openreach. “These include FWA [Fixed Wireless Access] and low-orbit satellites, and we have mentioned balloons, we should be open-minded.”

Fibre should be the objective but doesn’t mean you have to deliver it to everyone and everywhere tomorrow. As Selly pointed out during his time on stage at the Connected Britain event, connecting the first 80% of premises to fibre is not an issue. It is expensive, it is time consuming, but its not complicated. The next 10% is going to be much more difficult, and the final 10% is where they haven’t worked it out yet.

Another interesting point is whether customers actually need fibre connectivity right now. In the desire to go end-to-end, you have to wonder whether fibre is needed for the last-mile. Long-term, of course it will be necessary, but it is about addressing the desire not the technology.

“In my opinion, government has been focusing too much on full-fibre,” said Three CEO Dave Dyson. “I would like the government to take a step back and understand what people actually need. Full-fibre is an answer, but it is not the only answer.”

Again, we would like to emphasise fibre should be the long-term aim. But, you have to ask what the actual objective of the UK Government is. In this case, it is to deliver faster connectivity to citizens across the entire country, irrelevant to the local environment.

Understanding fibre is the long-term objective, but the mid-term objective is accessibility to faster and more reliable connectivity is an outcome-focused strategy. This is where fixed-wireless access can play a role, as can low-orbit satellites and even balloons. The last mile can be delivered through a variety of options, as long as the foundation of the network is fibre, giving the option to extend in future years.

Unfortunately, it seems the UK is in a difficult position of its own making. In not embracing fibre earlier, it is behind the trends. A commitment to full-fibre might have been the right call 6-7 years ago, but the situation has changed. The current strategy does not necessarily present the UK with the best route towards the full-fibre nation; the plan should be evolved to consider context.

Here is pragmatic example, how many people actually need speeds north of 150 Mbps right now? Not many. Fibre is the best option for the long-term, but focusing on developing the foundations, delivering the experience which customers need and expect, while also creating a more sustainable approach to ROI should be the mid-term objective.

As Dyson pointed out, FWA offers the team a more readily available opportunity to drive revenue on a per-user basis. It allows them to react to customer demand as opposed to forecasts. However, for the proposition to work as promised fibre needs to be rolled at least to the cabinets everywhere.

This is a divisive topic. Some believe the telcos should bite the bullet and simply pay to get fibre everywhere. Holding them accountable is perfectly reasonable, but you have to also take into account the telcos have to make money as well.

When you consider context, financial demands and future-proofing the network, the equation is a very difficult one to balance. Fibre should be the long-term objective, but right now the demands are for faster broadband while also addressing the appetites of those in the rural communities. The other options to satisfy the connectivity demands of today should not be ignored, which is perhaps what is being done with the Government’s hardcore focus on full-fibre.

Strategies should be outcome focused not technology defined. This is perhaps the problem the UK is facing today.

CityFibre puts forward the case against telecoms consolidation

Whenever CityFibre CEO Greg Mesch takes the stage at an industry conference you can expect a combative presentation and once again he delivered.

There was of course the customary pop at Openreach and the odd moan about the way fibre is advertised, but the crux of the talk at Connected Britain this morning focused on competition. No-one in the industry is brave enough to suggest competition is bad, but there are nuances to every argument. This nuance from Mesch effectively undermined the recurring argument that consolidation is good.

“Whoever takes over from Sharon White at Ofcom must not only encourage competition but protect it,” Mesch stated.

Competition is a buzzword which can be applied to almost every facet of the industry, and CityFibre has certainly benefitted from the hype. This is not to say the focus from government and regulators to promote competition is the only reason CityFibre is a success, it did after all spot a weakness in the fibre market and aggressively capitalised ahead of Openreach. But a nod to the desire to promote competition should be made.

Intensifying the focus on increasing competition will continue to benefit CityFibre, and arguably it will continue to benefit the UK, however it does present a problem for others in the telco industry. The more successful CityFibre is, the more the argument that CSP consolidation will be a good thing.

“The spark of competition has transformed into a small flame, but that small flame can be snuffed out if not protected,” Mesch stated.

It hasn’t been long since the UK was captured by the Openreach monopoly, and even after Virgin Media entered the fray, the country wasn’t exactly a competitive hotspot. CityFibre has added another dimension and the growth of ‘alt-nets’, such as HyperOptic, is further adding variety.

The UK telco landscape is certainly changing, and CityFibre has evolved as a business. To describe it as a plucky challenge would be a bit unfair nowadays, especially with the financial injection from Antin Infrastructure Partners and Goldman Sachs. Mesch said the board has approved expansion plans, and soon enough CityFibre will have deployed a fibre spine in more than 70 locations around the UK.

The success of CityFibre is arguably a factor which is pushing Openreach towards a fibre-first mentality, perhaps because Mesch and co. proved there was appetite in the market. And elsewhere, there are more competitors appearing on a more regional basis. HyperOptic is gaining scale in London, Toob has a presence in Southampton and Gigaclear is growing in the South-West.

Perhaps most importantly, the alt-nets are now being considered as realistic alternatives.

At the same conference, Sky UK CEO Stephen van Rooyen pointed out the company had unveiled an RFP in March with plans to announce the selected partners in the Summer. Sky is taking an interesting approach here, with plans to work on a regional basis with alt-nets instead of taking a nationwide procurement approach.

Arguably, because of the likes of CityFibre and the increasing popularity of the alt-nets, fibre is being pushed up the agenda and this isn’t even considering the ludicrous and idiotic statements made by Tory Leadership content Boris Johnson.

For the UK Government and regulator, the increasingly prominent role of fibre validates and justifies its pro-competition, anti-consolidation position. If the fibre landscape can benefit from increasing the number of players, the same arguments and theories can be applied elsewhere. This success effectively undermines any pro-consolidation voices which might still exist.

BoJo’s 2025 fibre promise has no basis in reality

Being ambitious is all well and good, but most would hope the ambitious are living in the world of reality. Unfortunately, with Boris Johnson’s Fibre-to-the-Home objectives, he’s operating in dreamland.

Perhaps this is a situation which we should have come to expect. Theresa May has one foot out the door and the jostling to inherit 10 Downing Street is starting to ramp up. This weekend saw the first televised debate, with one obvious omission, and soon enough the big promises to woo the Conservative Party membership are going to be dominating the headlines.

Politicians tend to exaggerate when it comes to promises on the campaign trail, and Tory leadership hopeful Boris Johnson (BoJo) certainly has history; who could forget the £350 million we were going to save the NHS every day by leaving the European Union.

The latest promise from BoJo is his government would deliver full-fibre broadband to every single person in the UK by 2025. This target would wipe off eight years from the current strategy set up by the Government in the Future Telecoms Infrastructure Review (FTIR).

Just to emphasise this point. The current objective is seen as ambitious and would see the full-fibre rollout complete in just over 13.5 years, but BoJo is suggesting it can be done in less than half that time.

The feedback from our conversations with industry is simple; what planet does BoJo think he is on?

However, what is worth bearing in mind is that the ambitious always have been criticised. When someone comes out with a bold idea, sceptics will beat them back. It is easy to criticise BoJo with this claim, because it is almost impossible to imagine how it is going to be done, but on the other hand, it is almost impossible to criticise the ambitious because there is no substance, no detail and no plan. It’s not something which should be taken that seriously because there are no details in place to actually make it happen.

One of the questions you have to ask is when did BoJo become a telco guru? We’re struggling to think of any examples of when he has contributed in any meaningful manner to the connectivity debate. If BoJo has had these telco smarts all along, able to solve one of the biggest challenges the industry has faced in decades, he certainly was playing the long-game in keeping them to himself.

Openreach has of course been perfectly politically correct when asked for comment. “It’s hugely ambitious, but so are we,” said an Openreach spokesperson. “We agree that full fibre can be the platform for the UK’s future prosperity and no company is investing more, building faster or aiming higher than Openreach. We aim to reach four million homes and businesses by March 2021 and up to 15 million by mid 2020s if the conditions are right.

“We’re already in decent shape when it comes to ‘superfast’ broadband, which is more widely available here than in almost any other comparable nation on earth – and has led the UK to have the leading digital economy in the G20.

“But building full fibre technology to the whole of the UK isn’t quick or easy. It requires £30 billion and a physical build to more than 30m front doors, from suburban terraces to remote crofts. We’re determined to lead the way and there’s a lot that Government could be doing now to help us go further and faster.”

But let’s assume BoJo is the master of telco, as we don’t have to be as nice as those in the industry; we have a couple of questions. Firstly, where is the money coming from? Secondly, where are the scissors to cut through the red-tape maze? Thirdly, where are the new employees going to emerge from? And finally, how did he actually come to this figure without actually speaking to anyone in the industry?

Starting with the money, the big query from our contacts was where is the cash coming from? The telcos are working as fast as they are commercially capable of, but BoJo believes they can go faster should the right incentives be put in place. The industry suggests full-fibre infrastructure would cost in the region of £30 billion, and it won’t be stumping all of that cash up. That’s not how investment strategies work.

A sensible and scalable capital investment strategy is focused on gradual rollouts, with an emphasis on ROI as the deployment progresses. You need to reclaim the investment as you are continuing to spend otherwise you are making yourself vulnerable to seesaw of market trends through over-exposure.

If BoJo is suggesting massive government funding projects, fair enough, but considering the NHS is underfunded, schools are overcrowded and there aren’t enough coppers on the beat, we’re not too sure where he is going to find this cash to fix what is fundamentally a first-world problem.

Secondly, you also have to wonder whether BoJo has put any thought into the bureaucratic challenges which the industry is facing. This is what our industry insiders were so confused about; has there been any thought to the administrative and bureaucratic challenges which are some of the biggest hurdles to deployment?

The 2033 target is one which has been put in place with these challenges in mind. The Government is considering proposals which would address way leaves, access to new builds or business rates for fibre, but these are still question marks. Perhaps BoJo is going to come in and carve away all the red-tape which is holding deployments back, creating a light-touch regulatory environment.

2033 will only be achieved should the right regulatory conditions be cultivated. If BoJo is going to correct this challenge, he’ll have to take a very large hatchet to the rulebook. This point has also been echoed by the Internet Services Providers’ Association:

“Boris Johnson’s ambitious commitment to achieve full fibre coverage by 2025 is welcome, but needs to be matched with ambitious regulatory change, including reform of the Fibre Tax,” said Andrew Glover, ISPA Chair. “Broadband is a largely privately financed infrastructure and together with outdated planning laws, fibre business rates are holding our members back from accelerating their roll-out plans.”

Another consideration is on the people side of things. Openreach recruited 3,000 engineers last year and is planning to recruit another 3,000 this year. Virgin Media is continuing to recruit to fuel Project Lightning, but you have to wonder how many bodies these companies will need to meet the 2025 target.

Even if there was an aggressive recruitment drive, people with the right skills are not just lazing about on street corners. One person pointed out that it isn’t a case of simply putting a hard hat on Joe Bloggs and asking them to dig a hole; there is a lot of training which goes into the recruitment progress. Another wondered whether there would be enough potential recruits if BoJo achieves another one of his headline promises; Brexit. How much of a talent drain will there actually be?

The speed at which full-fibre networks are being deployed is already pretty quick, the industry is connecting 3-4 million homes a year to meet current objectives. To hit Bojo’s ambitions, this number would have to be north of 5 million a year. Virgin Media’s Project Lightning is adding 400,000-500,000 premises a year, while Openreach is adding more than a million. Add in the alt-nets and progress is promising. Going faster is going to be tricky in today’s world.

We’re not too sure who BoJo has been talking to when he came to the 2025 target, but one thing is pretty clear; he’s not on the same page logistically, bureaucratically or financially as the telcos.