UK shines for Liberty Global in Q3

The UK market proved to a be a success over the last three months for Liberty Global, though the same could not be said for the Belgium and Swiss operations.

Total revenues for the quarter stood at $2.9 billion, a 1.3% increase, with the UK business posting 3.6% growth. While this might sound positive, this is compared to 10.8% for the nine months of 2018 proving there is appetite in the UK for a full-fibre diet. Unfortunately, the success could not be replicated elsewhere, with the Belgium business dropping year-on-year revenues by 1.5% and the bottom falling out of the Swiss bucket with a 8.1% decrease.

“The Swiss market remains challenging but we have a number of initiatives that we believe will improve performance,” said CEO Mike Fries. “Our turnaround plan is underpinned by revamped video products, a refreshed MySports programming line-up, the launch of 1 Gig broadband speeds and a new and improved MVNO offering.

“The continued operating and financial momentum at Virgin Media helped fuel our Q3 results. With respect to our U.K. subscriber growth, we generated over 100,000 net additions, which represents a record third quarter performance. This achievement was supported by strong volume growth in both our Project Lightning and legacy footprints.”

Looking specifically at the UK business, cable revenues declined by 0.7% year-on-year to $2 billion, while mobile revenue increased 2.4% to $416 million and enterprise revenues were up 6.1% year-over-year to $491 million. Operating income decreased 4.8% year-over-year to $592 million, though with promising growth on the top-line, and an additional 109,000 subscribers to account for, overall you could say a good three month’s work.

With Liberty Global still on course to dispose of its businesses in Germany and Central Europe to Vodafone, the team might be able to turn more attention to the troublesome Belgians and Swiss.

Wifi performance is the service provider’s problem whether they like it or not

At the Cable Next-Gen Europe event in London a panel discussed the lessons learned from offering 1 Gbps domestic broadband.

It seems like the only way the ISP industry thinks it can persuade consumers to hand over more of their hard-earned cash is to promise ever-better performance. But consumers can be an awkward bunch and have a nasty habit of expecting that promised boost to be delivered. To make things worse they’re not shy about voicing their displeasure to expensive customer service departments.

They just won’t listen to reason. You can try explaining the problem is at their end thanks to rubbish routers, decrepit devices and unhelpful walls but it falls on deaf ears. As far as they’re concerned they’ve been promised 1 Gbps, they’re not getting it and they want to know what the company that took their money is going to do about it.

The consensus among the panel, which featured ISPs, specialist wifi vendors and a big kit vendor, was that wifi is the ISP’s problem whether they like it or not. A big reason for this is that regular punters aren’t even interested in the various technical challenges involved in delivering the promised bandwidth; they only care about the end result.

Having said that there are a lot of technological solutions to this problem, such as mesh wifi as offered by companies like Plume, which was represented on the panel. Mesh looks like a good answer to coverage problems resulting from the limited range of wifi routers, physical obstructions, etc. It’s quite a trending buzzword in the industry right now but even the mesh vendors were careful not to position it as a panacea.

Similarly successive generations of wifi technology, now belatedly using a more consumer-friendly naming scheme, only address part of the problem. Even if you have a 1 Gbps service and the latest Wi-Fi 6 router, of all your devices still have 802.11g wifi chips, which is apparently still commonplace, then you’re still going to get rubbish performance.

According to a straw poll among the panel it’s not uncommon for there to be 20+ wifi connected devices in a given home, through which CSP customers will assess the quality of their service. For this reason there was a consensus that there will be an explosion in managed wifi services offered by CSPs in the near future.

Ofcom’s competitiveness quest continues with another ducts and poles assault

Ofcom has unveiled its latest edition of its business connectivity market review with an all too familiar feel; how can it force Openreach and BT to play nicer with competitors.

As with any former state-owned monopoly, BT/Openreach is in the enviable position of having the groundwork already laid for future-proof infrastructure. Of course it has not done enough across the years to meet the demands of tomorrow’s fibre-based diet, though one factor behind this is a lack of external pressure on the business. Without competition, the enforced need to invest and innovate is not there. This is ultimately Ofcom’s objective; create an environment which encourages other ISPs to lay their own connectivity foundations, decrease the reliance on Openreach and improve connectivity options for the consumer.

“We want to give companies greater flexibility to lay fibre networks that serve residential or business customers,” Ofcom said in a statement. “So today, we are consulting on proposals to allow access to Openreach’s ducts and poles to companies offering any type of telecoms services including high-speed lines for large businesses, networks carrying data for mobile operators and high capacity lines supporting broadband services. We intend to implement this unrestricted duct access from spring 2019.”

This review focuses on the areas where there is minimised or no competition for BT. Ofcom believes BT currently has almost 5,600 local exchanges, though at roughly 5,000 of these sites there is competition from fewer than two competitors. BT’s position has been deemed unacceptable in these areas.

Starting with the areas where there is evidence of potential competition, but BT still maintains ‘significant market position’, Ofcom will no longer impose a cost-based charge control or quality of service standards on BT’s wholesale services, which combined with access to BT’s ducts and poles, the theory is competitors will have a stronger incentive to build their networks.

In areas where network competition is unlikely to be a reality, Ofcom has proposed a price cap for services at 1 Gbps and below to protect customers and provide certainty and stability over the course of the review. What is worth noting is that this is a relatively short-review, as while the proposals could come into play next spring, 2021 would see a new review and therefore new proposals.

The final proposal comes at the 4,300 exchanges where BT faces no competition from rival operators for inter-exchange connectivity, and Ofcom has deemed opening up the ducts and poles will have little impact. Rival networks are too far from these exchanges to make it economically viable to serve these exchanges, therefore BT is the only choice as a supplier for backhaul. Ofcom is proposing a requirement for dark fibre at cost for inter-exchange circuits that connect to these locations.

This is of course not the first time the dark fibre suggestion has emerged from Ofcom. In April, Openreach officially launched a compromise between full dark fibre access and full managed service after months of bickering and reviews with BT attempting to resist the Ofcom intervention. Ofcom seemingly lost that battle, with fingers being pointed at suspect market definitions, though now it appears ready to restart the assault.

This is of course only the consultation stage of the process, though the plans are to get the new rules in place by next spring. Whether this timetable is realistic with the almost guaranteed legal challenge from BT remains to be seen, but this is just another step in the never ending Ofcom quest to improve connectivity and competition across the UK.

Shareholder attitudes on fibre are shifting – investor

Some telcos might have been afraid of committing to fibre deployment due to the vast expense and potential shareholder backlash, but attitudes are changing.

Over the last few years the need to invest in fibre has become increasingly evident, though progress is incredibly varied. Forward-looking telcos, Orange for instance, have been pumping cash into fibre deployment for years, while stuttering operators such as BT and Deutsche Telekom has chosen alternative technologies in an incredibly short-sighted move, maybe satisfy the bloodhounds in the annual general meeting, and the rising demands of the consumer.

While technologies such as G.Fast or vectoring might be appealing to the accountants, with the gigabit-economy around the corner, the shortfall is starting to look quite obvious. What was initially sold as a cunning move now looks to be nothing more than delaying the inevitable, with the overall result a net loss. But with attitudes towards fibre changing, the intensity of fibre rollouts might just increase. And it isn’t a moment too soon.

“We’ve seen the evolution of fibre as an asset class which is becoming much more accepted and more confidence in the take up and monetization potential of fibre,” said Chris Hogg, Investment Director at Amber Infrastructure, speaking on a panel session at Broadband World Forum in Berlin. “As an investor, we are getting a lot more confidence in the ability of the market to maintain the uptake level. It becoming a lot more visible and a lot easier to have confidence in these projects.”

Hogg’s position does offer him considerable credibility in making such comments, though he does work for a fund which specifically targets infrastructure projects and companies. This might not be the common attitude amongst the investor community. Kate McKenzie, CEO of wholesale network operator Chorus, does however confirm his position.

“We have definitely seen a change,” said McKenzie. “When we first started investors were sceptical about market adoption, but now investors are asking how they can go faster with the rollout.”

The issues from yesteryear were relatively simple. With profits being squeezed at the telcos thanks to the intervention and disruption of the OTTs, shareholders asked whether such vast expenditure on fibre was necessary. Firstly, did the network need such a facelift when it is dealing with the demands of the 3G and 4G world, and secondly, would the consumer appetite for fibre be there? Some investors doubted the business case, and these are the telcos who are falling behind when it comes to fibre rollout.

But what has changed over the last couple of years? Firstly, the consumer has demonstrated he/she is prepared to pay more for fibre connectivity. Secondly, new services emerged (Netflix for example), and new segments grew substantially (gaming) pushing the networks to the limit. Finally, 5G. The first point demonstrated there would be buyers for the new products, while the latter two suggested telcos would not even be able to offer adequate services unless the money was spent.

The takeaway here is simple; spend or die. Unfortunately for those who are late to the party, expenditure will squeezed into a smaller timeframe, while they’ll be playing catch-up in the time consuming task.

With 5G emerging, the investments in fibre become a little bit more palatable for investors however. With the incredible data rates promised with 5G, fibre is a necessity to ensure network performance. And while it might be able to act as a replacement for the last mile for broadband, fixed wireless access, the sites still need to be fibered up. It is as much an opportunity for connectivity as it is a threat to traditional broadband products.

“We’ll always need fibre to service the base stations,” said Dana Tobak, CEO of Hyperoptic, a UK fibre-to-the-premises broadband provider. “Some people think they’ll only need one connectivity technology in the future, but as our appetite grows, we’ll need more routes to the internet.”

For those investors who back fibre deployment plans over the years, well done. Those who were too timid, bad bet, there’s catching up to do now.

Ofcom officially releases BT from its Openreach undertakings

Measures BT undertook in 2005 to placate Ofcom over its wholesale operations are officially no longer relevant, so it doesn’t need to bother.

This seems to be a bit of a formality, since the legal separation of Openreach from BT is supposed to mean BT has no direct influence over the fixed line wholesaler. But at the very least it marks a milestone in BT’s relationship with Ofcom and gives Philip Jansen one less thing to worry about when he takes over next year.

The previous milestone was the official transfer of 31,000 staff from BT Group to Openreach at the start of this month. “This is an important day for Openreach as we’re fulfilling the commitments to Ofcom under the Digital Communications Review,” said Openreach Chairman Mike McTighe at the time. “Openreach now has its own Board, greater strategic and operational independence, a separate brand and an independent workforce – and we’re ambitious for the future.”

The long and short of it seems to be that Openreach now has a separate and distinct relationship with Ofcom and will be assessed solely on its own merits, with no BT baggage. This is probably good news for everyone and is ultimately what all this ‘legal separation’ business is supposed to be about. It should also protect Openreach from accusations of favouring BT. You can read the full statement here.

A possible manifestation of this new, unfettered Openreach may have been the announcement last week that it is dropping the price of full fibre broadband infrastructure to new homes by 75%. Openreach got a nice lot of kudos from public figures for doing its bit to improve fibre coverage, so job done there.

We’ll be ready for 5G by 2020 – Reliance Jio

Reliance Jio owner Mukesh Ambani has stated India will be fully-4G by 2020, and is setting his eyes on the 5G euphoria already.

The statement of intent adds to a remarkable couple of years for Reliance Jio and the Indian digital economy on the whole. Starting from nothing in December 2015, Reliance Jio has risen to become arguably the most influential telco in India, dragging the country’s digital economy into the 21st century. A little over two years ago, India was in the digital baron lands, though now the Indian digital appetites are as insatiable as those in ‘developed’ nations.

“India has moved from 155th rank in mobile broadband penetration to being the number 1 nation in mobile data consumption in the world… in less than two years,” said Ambani at the India Mobile Congress, courtesy of Live Mint. “This is the fastest transition anywhere in the world from 2G/3G to 4G. By 2020, I believe that India will be a fully-4G country and ready for 5G ahead of others.”

Paying complements to the pro-active approach to stimulating the digital economy from the Indian government, Ambani is continuing the ambitious expansion of the Reliance Jio business. 5G is what will attract the headlines, most notably after a few telcos highlighted 5G is not a top priority for some nations at Broadband World Forum last week, but the broadband ambitions are just as important.

Tackling the 5G euphoria and increasing broadband penetration across the country perhaps work happily alongside each other when you consider the importance of a fibre network in both cases. The JioGigaFiber proposition, announced during the company’s AGM in July, promises FTTH connectivity in a market where broadband penetration is roughly 10%. ‘Fibering up’ the country is critical for 5G, and Reliance Jio has already started the mission.

“India will be among the largest digital markets in the world,” said Ambani. “Every enterprise must have an ‘India First’ vision to participate in this market. We will need to reinvent to grow and nurture this market to its full potential. This will be a win-win for the entire industry, for India and for the entire world.”

One interesting question which remains is whether the lessons taken from the Jio-effect can be implemented into other nations which are struggling in the lowly places of the digital league tables.

FWA could help inform operators of fibre rollout priorities – Nokia

While some are still sceptical of the longevity and performance characteristics of Fixed Wireless Access (FWA) as a usecase for 5G, Nokia thinks it could serve a very useful purpose for fibre rollout plans.

Although the case for fibre has been built and justified, forecasting where demand will actually be is still a tricky task. For every correct prediction analysts and forecasters make, we suspect there will be dozens of forgotten failed ones. But Stefaan Vanhastel, Head of Fixed Networks Marketing at Nokia, thinks there could be useful benefits from FWA in making economical and efficient fibre rollout plans.

Here is Vanhastel’s theory. Offering a gigabit FWA service to customers will meet the demands of tomorrow, and offer a bit of breathing room from those who demanding full-fibre connectivity. Monitoring the data consumption of customers who have taken up the service could indicate where the greediest users are, and therefore the greatest potential for strain on the network and bottlenecks. Once these areas have been identified, they can be the first to receive the full-fibre connectivity diet.

Although fibre is the perfect solution for our connectivity cravings at home and work, upgrading current infrastructure is not going to happen overnight. It is an incredibly expensive process, time consuming and fibre is a product which is in high-demand. The reality of fibre connectivity is that it will be a gradual rollout throughout the network. Connecting small cells with fibre is a tough enough ask, but the last-mile is where telcos will struggle the most. 5G FWA might offer a temporary solution, while also providing valuable insight to the areas which need full-fibre the most.

Of course, it’s always worth bearing mind Nokia has something to gain out increased FWA interest, though it is not the worst idea we have ever heard.

CityFibre pumps £2.5 billion into full-fibre challenge

CityFibre is stealing headlines once again, not trolling the industry this time, but investing £2.5 billion into it fibre network.

With various sized fibre footprints in 37 towns and cities throughout the UK, CityFibre has suggested the cash will be used to create a full-fibre environment. In some areas, such as Milton Keynes, the rollout is already underway, though in cities like Wakefield where the fibre spine is only 36km long, rollout will be accelerated.

“With a head-start in 37 towns and cities, this full fibre investment plan enables us to further accelerate our rollout, catalysing huge economic growth in regional towns and cities across the country and transforming the UK’s digital future,” said Greg Mesch, CEO of CityFibre.

“Our rollout will soon bring to scale an innovative wholesale network, providing internet service providers and mobile network operators with greater choice and unrivalled technical capabilities, benefitting all sectors of the market. We now need to work together across Government, Ofcom and industry to create a level-playing field that continues to encourage investment from multiple network operators, so that full fibre can be delivered as quickly and effectively as possible.”

With the new cash, and confidence from new owners Antin Infrastructure Partners and West Street Infrastructure Partners, CityFibre plans to deliver full fibre to five million homes, a fifth of the Government’s 2025 target of 15 million. The scale of its plan means it will be awarding city and town-wide construction contracts across the country for several years to come.

While CityFibre is certainly providing viable alternatives to the status quo through its partnership with Vodafone, this investment takes the challenge up a notch. Alt-nets are becoming increasingly popular throughout the world, and CityFibre is flying the flag in the UK.

“Significant investment from new network operators is critical to deliver our ambition for nationwide coverage,” said Jeremy Wright, Secretary of State for Digital, Culture, Media and Sport. “Through our Industrial Strategy we’re working with businesses and Ofcom to ensure effective network competition that supports investment on this scale.”

£2.5 billion is a nice big number, and it’s quite refreshing to be able to report about CityFibre on a story where it isn’t antagonising competitors or moaning about not being given an advantage by regulators.

Nokia plugs openness ahead of Broadband World Forum

Open is one of 2018’s buzzwords and Nokia is cashing in on the bonanza ahead of Broadband World Forum in a couple of weeks.

This is only the first of several announcements from the Finns, but it builds on the fibre connectivity and virtualisation foundations set last year. The first installment is focused on fixed access network slicing and multi-vendor optical network units (ONU).

Starting with the network slicing piece, the team plan to launch a fully open and programmable network slicing solution for fixed access networks. While the buzz for network slicing has been primarily focused on the mobile side of telecommunications, Nokia’s Head of Fixed Networks Marketing Stefaan Vanhastel told Telecoms.com the solution can be just as effective in fixed access.

“Yes network slicing is a hot topic for 5G, but we are now starting to see the benefit for slicing in a fixed network,” said Vanhastel. “Operators can use residential network for 5G transport – why not, you already have a network and can save up to 50% of deployment costs. Why not use the same infrastructure for residential broadband, enterprise customers and 5G transport.”

In the same way network slicing can be used to create several virtual networks in the wireless business, why not do it in fixed access? Not only does it allow telcos to more efficiently plan for the world of 5G transport, while simultaneously serving a variety of customers, it opens up a host of new deployment models.

Vanhastel highlighted there are several non-traditional players building their own networks, individual cities or national governments for example, though these are not the people you would want running telco services. Local authorities have plenty of experience from a civil engineering perspective, digging the trenches and deploying the networks, but with network slicing capabilities several virtual networks can be created to bring-in the right expertise to deliver the services.

This is one idea which will aid the deployment of future proof networks, though network slicing could also help co-operative efforts and co-investment from competitors. The physical deployment of the network can be shared between any number of telcos, with each then claiming their own ‘slice’ which can be managed and configured independently. Openness and collaboration seems like a nice idea, though few competitors can play nice unfailingly, but with network slicing they only have to for a set period of time (in theory) before turning their attention to their own business.

Secondly, Nokia has launched Multivendor ONU connect, which it claims is the first fully open, virtualised solution that allows telcos to connect any optical network unit (ONU). The solution takes a ‘driver’ approach to how telcos deploy and manage ONUs, allowing for ‘plug and play’ functionality. As part of Nokia’s Altiplano open programmable framework, software is decoupled to allow the ONU management to be virtualised. An open-API framework allows third-party stacks to be on-boarded in a more time-efficient manner.

The approach will offer telcos the opportunity to realise the benefits of interoperability, connecting any modem to an access platform and potentially removing the painstaking task of integration. Vanhastel said that once the whole management infrastructure is virtualized, it would be possible to connect any fibre modem to access networks without the hassle, while updates or new ONUs can be quickly introduced through software upgrades.

Broadband World Forum might still be a couple of weeks away, but the Nokia marketing message is clear; simplicity and openness.

Three and O2 put positive spin on sh*t connectivity

Three and O2 have signed a deal with SSE Enterprise which will enable the pair to access its fibre ring, part of which is located in the Thames Water waste water network, to improve connectivity backhaul capabilities.

With 5G on the horizon, and demands for improved 4G experience, partnerships like this will be key to not only improve backhaul but also enable further 4G and 5G deployment by connecting cell sites and masts. Robust aggregation of fronthaul and backhaul access is necessary in order to provide greater resiliency, increase capacity and reduce latency. In other words, fibre is king if you want to meet the demands of the data-craving consumers.

Just to put things in perspective, UK data usage is set to grow thirteen-fold between 2017 and 2025 according to data from Ofcom, with the first 5G offerings set to hit the market during 2019. To meet this demand, 5G is key, enhanced 4G experience is key and backhaul is key. Fibre rules the roost.

“Networks will fundamentally underpin the UK’s digital economy and will be essential to 5G services,” said Colin Sempill, MD of SSE Enterprise Telecoms. “With this high capacity core in the London sewers, Three UK and O2 are tapping into our unique, diverse connectivity and putting their networks in a strong position to trial 5G offerings, while enhancing existing services for their customers.”

“New and innovative models are essential to improving the customer experience of mobile networks by increasing the availability of dark fibre for mobile backhaul and driving competition in the market,” said Dave Dyson, CEO of Three. “Our partnership with SSE Enterprise Telecoms and O2 is one of the first examples of using existing infrastructure to improve connectivity in an urban area.”

“This kind of agreement is essential to allow for continued investment and improvement of services for our customers,” said Brendan O’Reilly, CTO at O2. “This partnership is a great example of SSE Enterprise Telecoms, Three UK and O2 coming together in a collaborative and innovative way to address the growing challenge and pressure of obtaining access to fibre for mobile backhaul in the UK.”

SSE has been running some interesting projects to improve the speed and reduce the cost in terms of laying fibre over the last couple of months. In this example, SSE is licensed to lay fibre optic cables throughout Thames Water’s waste water network which it claims can reduce network deployment costs by 60% and speed up deployment by up to ten times. As the sewers can be as deep as 10 metres, laying the fibre in this way can decrease accidental fibre breaks as the traditional means see the cables laid only 12 inches below the surface. The waste water network is also geographically very wide-spread, it is a creative solution to the challenge of laying fibre more efficiently, even if it is a bit of a smelly one.

The agreement with Three and O2 will see approximately 100 points of connectivity exit from this central London sewer network via two BT Exchanges. By partnering with SSE Enterprise Telecoms, Three and O2 can operate their own Central London Area (CLA) network, while also accessing spare fibre ducts for future initiatives in London.

The last couple of months have seen SSE ink numerous deals with the telcos, including a separate partnership with Three where it has begun facilitating fibre optic connections for the telcos 20 core data centres. Last October, SSE also won a competitive tender from advanced fibre broadband specialists Grain to deliver network connectivity to Countesswells, a new £800 million development in Aberdeen.