Infracapital secures SSE Enterprise Telecoms stake

Infracapital has become the latest investment firm to secure a stake in the increasingly popular connectivity industry with a £380 million investment in SSE Enterprise Telecoms.

The deal will see Infracapital secure a 50% stake in the SSE Enterprise Telecoms business, with £215 million to be paid on completion of the transaction, the end of June, and up to £16 million in a series of instalments depending on the performance of the business in the future.

“Infracapital’s investment in SSE Enterprise Telecoms shows the confidence it has in the future growth of the business,” said Colin Sempill, SSE Enterprise Telecoms MD. “It recognises the success we have achieved to date, building out a great network, winning notable contracts and being relentlessly focused on customer satisfaction. Both parties see this as an opportunity to help develop the network infrastructure that this country needs to turn the vision of the UK’s digital economy into reality.”

“High-speed connectivity is vital to economic growth and prosperity and we are delighted to announce this partnership with SSE plc.,” said James Harraway, Infracapital Director. “SSE Enterprise Telecoms is an established telecoms infrastructure provider and is well positioned to support growth in this critical sector. Infracapital has considerable expertise of investing in digital infrastructure and we look forward to working closely with our new partners as the business continues to grow, deliver new projects and expand its networks.”

While SSE Enterprise Telecoms is not necessarily a heavyweight on the UK’s connectivity scene, this investment is just another example of financial firms becoming increasingly interested in alternative network providers, or Alt-nets. Hyperoptic is another example, having secured £250 million from eight international banks to extend its full fibre optic network, while CityFibre secured a debt package of £1.12 billion last month, after being bought by a Wall Street investment consortium in April.

More than anything else, this is an indication that perhaps things are not going as badly in the telecommunications as some would have you think. It might be going through a rocky time competing with the OTTs, regulations might not be going all the right directions and revenues are not growing at a rate of knots, but such investments show there is confidence in future success. The industry has demonstrated consumers are willing to pay for larger data bundles and fibre connectivity, and now the financial industry is listening more acutely.

For the Alt-nets and the consumer, it is a great sign. Securing more investments in the business, especially from those organizations which are not necessarily chasing the short-term pay out, will provide more security around CAPEX and deployment plans. It might not be the most exciting news from today, but it perhaps some of the most reassuring.

The biggest stories of 2018 all in one place

2018 has been an incredibly business year for all of us, and it might be easy to forget a couple of the shifts, curves, U-turns and dead-ends.

From crossing the 5G finish line, finger pointing from the intelligence community, the biggest data privacy scandal to date and a former giant finally turning its business around, we’ve summarised some of the biggest stories of 2018.

If you feel we’ve missed anything out, let us know in the comments section below.

Sanction, condemnation and extinction (almost)

ZTE. Three letters which rocked the world. A government-owned Chinese telecommunications vendor which can’t help but antagonise the US government.

It might seem like decades ago now but cast your mind back to April. A single signature from the US Department of Commerce’s Bureau of Industry and Security (BIS) almost sent ZTE, a company of 75,000 employees and revenues of $17 billion, to keep the dodo company.

This might have been another move in the prolonged technology trade war between the US and China, but ZTE was not innocent. The firm was caught red-handed trading with Iran, a country which sits very prominently on the US trade sanction list. Trading with Iran is not necessarily the issue, it’s the incorporation of US components and IP in the goods which were sent to the country. ZTE’s business essentially meant the US was indirectly helping a country which was attempting to punish.

The result was a ban, no US components or IP to feature in any ZTE products. A couple of weeks later manufacturing facilities lay motionless and the company faced the prospect of permanent closure, such was its reliance on the US. With a single move, the US brought one of China’s most prominent businesses to its knees.

Although this episode has been smoothed over, and ZTE is of course back in action, the US demonstrated what its economic dirty bombs were capable of. This was just a single chapter in the wider story; the US/China trade war is in full flow.

Tinker, tailor, Dim-sum, Spy

This conflict has been bubbling away for years, but the last few months is where the argument erupted.

Back in 2012, a report was tabled by Congressman Mike Rogers which initially investigated the threat posed by Chinese technology firms in general, and Huawei specifically. The report did not produce any concrete evidence, though it suggested what many people were thinking; China is a threat to Western governments and its government is using internationally successful companies to extend the eyes of its intelligence community.

This report has been used several times over the last 12 months to justify increasingly aggressive moves against China and its technology vendors. During the same period, President Trump also blocked Broadcom’s attempts to acquire Qualcomm on the grounds of national security, tariffs were imposed, ZTE was banned from using US technologies in its supply chain and Huawei’s CFO was arrested in Canada on the grounds of fraud. With each passing month of 2018, the trade war was being cranked up to a new level.

Part of the strategy now seems to be undermining China’s credibility around the world, promoting a campaign of suggestion. There is yet to be any evidence produced confirming the Chinese espionage accusations but that hasn’t stopped several nations snubbing Chinese vendors. The US was of course the first to block Huawei and ZTE from the 5G bonanza, but Australia and Japan followed. New Zealand seems to be heading the same way, while South Korean telcos decided against including the Chinese vendors on preferred supplier lists.

The bigger picture is the US’ efforts to hold onto its dominance in the technology arena. This has proved to be incredibly fruitful for the US economy, though China is threatening the vice-like grip Silicon Valley has on the world. The US has been trying to convince the world not to use Chinese vendors on the grounds of national security, but don’t be fooled by this rhetoric; this is just one component of a greater battle against China.

Breakaway pack cross the 5G finish line

We made it!

Aside from 5G, we’ve been talking about very little over the last few years. There might have been a few side conversations which dominate the headlines for a couple of weeks, but we’ve never been far away from another 5G ‘breakthrough’ or ‘first’. And the last few weeks of 2018 saw a few of the leading telcos cross the 5G finish line.

Verizon was first with a fixed wireless access proposition, AT&T soon followed in the US with a portable 5G hotspot. Telia has been making some promising moves in both Sweden and Estonia, with limited launches aiming to create innovation and research labs, while San Marino was the first state to have complete coverage, albeit San Marino is a very small nation.

These are of course very minor launches, with geographical coverage incredibly limited, but that should not take the shine off the achievement. This is a moment the telco and technology industry has been building towards for years, and it has now been achieved.

Now we can move onto the why. Everyone knows 5G will be incredibly important for relieving the pressure on the telco pipes and the creation of new services, but no-one knows what these new services will be. We can all make educated guesses, but the innovators and blue-sky thinkers will come up with some new ideas which will revolutionise society and the economy.

Only a few people could have conceived Uber as an idea before the 4G economy was in full flow, and we can’t wait to see what smarter-than-us people come up with once they have the right tools and environment.

Zuckerberg proves he’s not a good friend after all

This is the news story which rocked the world. Data privacy violations, international actors influencing US elections, cover ups, fines, special committees, empty chairs, silly questions, knowledge of wrong-doing and this is only what we know so far… the scandal probably goes deeper.

It all started with the Cambridge Analytica scandal, and a Russian American researcher called Aleksandr Kogan from the University of Cambridge. Kogan created a quiz on the Facebook platform which exposed a loop-hole in the platform’s policies allowing Kogan to scrape data not only from those who took the quiz, but also connections of that user. The result was a database containing information on 87 million people. This data was used by political consulting firm Cambridge Analytica during elections around the world, creating hyper-targeted adverts.

What followed was a circus. Facebook executives were hauled in-front of political special committees to answer questions. As weeks turned into months, more suspect practices emerged as politicians, journalists and busy-bodies probed deeper into the Facebook business model. Memos and internal emails have emerged suggesting executives knew they were potentially acting irresponsibly and unethically, but it didn’t seem to matter.

As it stands, Facebook is looking like a company which violated the trust of the consumer, has a much wider reaching influence than it would like to admit, and this is only the beginning. The only people who genuinely understand the expanding reach of Facebook are those who work for the company, but the curtain is slowly being pulled back on the data machine. And it is scaring people.

Big Blue back in the black

This might not have been a massive story for everyone in the industry, but with the severe fall from grace and rise back into the realms of relevance, we feel IBM deserves a mention.

Those who feature in the older generations will remember the dominance of IBM. It might seem unusual to say nowadays, but Big Blue was as dominant in the 70s as Microsoft was in the 90s and Google is today. This was a company which led the technology revolution and defined innovation. But it was not to be forever.

IBM missed a trick; personal computing. The idea that every home would have a PC was inconceivable to IBM, who had carved its dominant position through enterprise IT, but it made a bad choice. This tidal wave of cash which democratised computing for the masses went elsewhere, and IBM was left with its legacy business unit.

This was not a bad thing for years, as the cash cow continued to grow, but a lack of ambition in seeking new revenues soon took its toll. Eight years ago, IBM posted a decline in quarterly revenues and the trend continued for 23 consecutive periods. During this period cash was directed into a new division, the ‘strategic imperatives’ unit, which was intended to capitalise on a newly founded segment; intelligent computing.

In January this year, IBM proudly posted its first quarterly growth figures for seven years. Big Blue might not be the towering force it was decades ago, but it is heading in the right direction, with cloud computing and artificial intelligence as the key cogs.

Convergence, convergence, convergence

Convergence is one of those buzzwords which has been on the lips of every telco for a long time, but few have been able to realise the benefits.

There are a few glimmers of promise, Vodafone seem to be making promising moves in the UK broadband market, while Now TV offers an excellent converged proposition. On the other side of the Atlantic, AT&T efforts to move into the content world with the Time Warner acquisition is a puzzling one, while Verizon’s purchase of Yahoo’s content assets have proved to be nothing but a disaster.

Orange is a company which is taking convergence to the next level. We’re not just talking about connectivity either, how about IOT, cyber-security, banking or energy services. This is a company which is living the convergence dream. Tie as many services into the same organisation, making the bill payer so dependent on one company it becomes a nightmare to leave.

It’s the convergence dream as a reality.

Europe’s Great Tax Raid

This is one of the more recent events on the list, and while it might not be massive news now, we feel it justifies inclusion. This developing conversation could prove to be one of the biggest stories of 2019 not only because governments are tackling the nefarious accounting activities of Silicon Valley, but there could also be political consequences if the White House feels it is being victimised.

Tax havens are nothing new, but the extent which Silicon Valley is making use of them is unprecedented. Europe has had enough of the internet giants making a mockery of the bloc, not paying its fair share back to the state, and moves are being made by the individual states to make sure these monstrously profitable companies are held accountable.

The initial idea was a European-wide tax agenda which would be led by the European Commission. It would impose a sales tax on all revenues realised in the individual states. As ideas go, this is a good one. The internet giants will find it much more difficult to hide user’s IP addresses than shifting profits around. Unfortunately, the power of the European Union is also its downfall; for any meaningful changes to be implemented all 28 (soon to be 27) states would have to agree. And they don’t.

Certain states, Ireland, Sweden and Luxembourg, have a lot more to lose than other nations have to gain. These are economies which are built on the idea of buddying up to the internet economy. They might not pay much tax in these countries, but the presence of massive offices ensure society benefits through other means. Taxing Silicon Valley puts these beneficial relationships with the internet players in jeopardy.

But that isn’t good enough for the likes of the UK and France. In the absence of any pan-European regulations, these states are planning to move ahead with their own national tax regimes; France’s 3% sales tax on any revenues achieved in the country will kick into action on January 1, with the UK not far behind.

What makes this story much more interesting will be the influence of the White House. The US government might feel this is an attack on the prosperous US economy. There might be counter measures taken against the European Union. And when we say might, we suspect this is almost a certainty, such is the ego of President Donald Trump.

This is a story which will only grow over the next couple of months, and it could certainly cause friction on both sides of the Atlantic.

Que the moans… GDPR

GDPR. The General Data Protection Regulation. It was a pain for almost everyone involved and simply has to be discussed because of this distress.

Introduced in May, it seemingly came as a surprise. This is of course after companies were given 18 months to prepare for its implementation, but few seemed to appreciate the complexity of becoming, and remaining compliant. As a piece of regulation, it was much needed for the digital era. It heightened protections for the consumer and ensured companies operating in the digital economy acted more responsibly.

Perhaps one of the most important components of the regulation was the stick handed to regulators. With technology companies growing so rapidly over the last couple of years, the fines being handed out by watchdogs were no longer suitable. Instead of defining specific amounts, the new rules allow punishments to be dished out as a percentage of revenues. This allows regulators to hold the internet giants accountable, hitting them with a suitably large stick.

Change is always difficult, but it is necessary to ensure regulations are built for the era. Evolving the current rulebook simply wouldn’t work, such is the staggering advancement of technology in recent years. Despite the headaches which were experienced throughout the process, it was necessary, and we’ll be better off in the long-run.

Next on the regulatory agenda, the ePrivacy Regulation.

Jio piles the misery on competitors

Jio is not a new business anymore, neither did it really come to being in 2018, but this was the period where the telco really justified the hype and competitors felt the pinch.

After hitting the market properly in early 2016, the firm made an impression. But like every challenger brand, the wins were small in context. Collecting 100,000s of customers every month is very impressive, but don’t forget India has a population of 1.3 billion and some very firmly position incumbents.

2017 was another year where the firm rose to prominence, forcing several other telcos out of the market and two of the largest players into a merger to combat the threat. Jio changed the market in 2017; it democratised connectivity in a country which had promised a lot but delivered little.

This year was the sweeping dominance however. It might not be the number one telco in the market share rankings, but it will be before too long. Looking at the most recent subscription figures released by the Telecom Regulatory Authority of India (TRAI), Jio grew its subscription base by 13.02 million, but more importantly, it was the only telco which was in the positive. This has started to make an impact on the financial reports across the industry, Bharti Airtel is particularly under threat, and there might be worse to come.

For a long-time Jio has been hinting it wants to tackle the under-performing fixed broadband market. There have been a couple of acquisitions in recent months, Den Networks and Hathway Cable, which give it an entry point, and numerous other digital services initiatives to diversify the revenue streams.

The new business units are not making much money at the moment, though Jio is in the strongest position to test out the convergence waters in India. Offering a single revenue stream will ensure the financials hit a glass ceiling in the near future, but new products and aggressive infrastructure investment plans promise much more here.

We’re not too sure whether the Indian market is ready for mass market fixed broadband penetration, there are numerous other market factors involved, but many said the initial Jio battle plan would fail as well.

Convergent business models are certainly an interesting trend in the industry, and Jio is looking like it could force the Indian market into line.

Redundancies, redundancies, redundancies

Redundancy is a difficult topic to address, but it is one we cannot ignore. Despite what everyone promises, there will be more redundancies.

Looking at the typical telco business model, this is the were the majority have been seen and will continue to be seen. To survive in the digitally orientated world, telcos need to adapt. Sometimes this means re-training staff to capitalise on the new bounties, but unfortunately this doesn’t always work. Some can’t be retrained, some won’t want to; the only result here will be redundancies.

BT has been cutting jobs, including a 13,000-strong cull announced earlier this year, Deutsche Telekom is trimming its IT services business by 25%, the merger between T-Mobile and Sprint will certainly create overlaps and resulting redundancies, while Optus has been blaming automation for its own cuts.

Alongside the evolving landscape, automation is another area which will result in a headcount reduction. The telcos will tell you AI is only there to supplement human capabilities and allow staff to focus on higher value tasks, but don’t be fooled. There will be value-add gains, but there will also be accountants looking to save money on the spreadsheets. If you can buy software to do a simple job, why would you hire a couple of people to do it? We are the most expensive output for any business.

Unfortunately, we have to be honest with ourselves. For the telco to compete in the digital era, new skills and new business models are needed. This means new people, new approaches to software and new internal processes. Adaptation and evolution is never easy and often cruel to those who are not qualified. This trend has been witnessed in previous industrial revolutions, but the pace of change today means it will be felt more acutely.

Redundancy is not a nice topic, but it is not always avoidable.

CityFibre bags £1.1bn for nationwide fibre rollout

During yesteryear, CityFibre was known for moaning for the sake of moaning, but in securing a debt package of £1.12 billion, the firm’s ambitions are starting to look very real and very interesting.

Seven banks have financed the transaction, ABN AMRO, Deutsche Bank, Lloyds Bank plc, Natixis, NatWest, Santander and Société Générale, which will serve as the first installment of CityFibre’s £2.5 billion commitment for a nationwide fibre rollout. CityFibre has given itself a target of providing fibre to five million homes, a third of the Government’s target of 15 million, by 2025.

“The appetite from these institutions to support our financing is further evidence that CityFibre’s strategy is the right one for the UK,” said Terry Hart, CityFibre’s CFO.

“As our networks are rolled out, this will benefit everyone, driving innovation and increasing fibre penetration across the UK, providing the future-proof digital connectivity the UK needs. CityFibre’s target to reach five million homes by 2025, as well as thousands of businesses and public-sector sites, will catalyse huge economic growth in regional towns and cities across the country.”

CityFibre made it abundantly clear in its statement that this is an endorsement of the firm’s business model from heavy hitting financial institutions, and perhaps it does indicate a change in attitudes from investors.

Back in October, we attended an investor panel session at Broadband World Forum featuring the likes of the European Investment Bank and also Amber Infrastructure, a specialist venture capitalist firm. The message was clear from this panel session; investors are increasingly happy to fuel fibre rollouts as the business case has been justified and consumer demand has been validated.

This is where CityFibre sits. It doesn’t want to be a telco but become a serious infrastructure player. Owning the relationship with the consumer is of zero interest but creating a nationwide alternative to Openreach and becoming a connectivity wholesaler is the big picture. However, to be considered a viable alternative, there needs to be more of a presence than there is today.

Telcos don’t want to have a patchwork of relationships across a country to meet the connectivity demands. Multiple relationships create more overheads and more opportunity for something to go wrong. CityFibre has made good progress in rolling out fibre spines in numerous areas across the UK, but the gaps will have to be plugged if it wants to be a viable and realistic alternative to Openreach.

That said, CityFibre is looking like a business which has the right ingredients for a market which is primed for disruption. Aggressive ambitions, a head-strong CEO and the confidence of being owned by one of the world’s most powerful businesses. CityFibre is a very strong contender to make a genuine and permanent dent in the connectivity infrastructure game.

And a £1.1 billion investment from seven major financial institutions is a very good place to start.

Openreach talks fibre in Edinburgh

With fibre becoming an increasingly politicised topic, fixed infrastructure wholesaler Openreach decided to hang out with a couple of Scottish politicians.

Ian Murray MP and Daniel Johnson MSP got to hang out with some engineers in Liberton, a suburb of Edinburgh, where Openreach has been laying some serious fibre down. Specifically this is of the FTTP variety, which enables Openreach to use emotive phrases such as ‘ultrafast broadband’ and ‘future-proof technology’.

“Good connectivity is vital for a strong local economy, so it’s been great to hear about the progress that’s being made and what that means for constituents,” said Edinburgh South MP Murray. “The fact that Edinburgh is one of the first places in the UK to benefit from Openreach investment in full-fibre will help make sure that our historic city remains at the forefront of technology.”

“It was particularly interesting to hear about the huge difference a full fibre connection will make to residents’ broadband speed, reliability and capacity,” said Edinburgh Southern MSP Johnson. “It was also useful to hear about developments at Openreach’s training centre in Livingston where a new fibre school will be launched next year. Engineering is a vital part of Scotland’s economy and skills learned there will benefit the nation.”

Jim Wylie, Openreach’s fibre operations manager for Edinburgh, said: “We know good broadband is really important to local people and we’re delighted to be building our first fibre city here in Edinburgh.

“Ian and Daniel share our ambition to make sure everybody in Scotland has access to a quality broadband service,” said Jim Wylie, Openreach’s Fibre Operations Manager for Edinburgh. “We appreciate that they were able to make time to come and learn about the challenges and realities of delivering digital technology. For example, a specific issue in Edinburgh is getting access to put new equipment on telephone poles, which are often sited in people’s back gardens!”

So this looks like a win-win; politicians get to be seen to be championing next-generation infrastructure for their constituents, while Openreach gets to lobby them for a few juicy concessions. Result.

Openreach to force feed localised fibre diet

It’s a new week, and therefore time for a new Ofcom consultation. This time the UK watchdog will be trying to understand whether it is feasible to hyper-localise regulations to encourage full-fibre networks.

While it might seem like a logical approach to dealing with an issue which is incredibly varied, the complexities have the potential to be quite staggering. Ofcom has previously commented on the difficulties in trying to force change onto the telcos, but this was a one size fits all approach; nuances depending on individual localities will most certainly test the competence, drive and patience of the team.

“Ofcom’s latest consultation underlines the importance of flexible rules when it comes to fibre infrastructure,” said Adrian Baschnonga, EY’s Telecoms Lead Analyst. “Levels of competition and willingness to invest vary by geography – and a more nuanced appraisal of the UK’s infrastructure landscape will play a key role in the regulation of fibre in years to come.”

In theory, the idea is a simple one. Regions will be placed into three categories, and the level of regulation will depend on the progress which has been made already. Those areas where fibre penetration is seemingly progressing steadily, i.e. the more commercially attractive areas, will feel the grace of deregulation, while on the opposite end of the scale, the more rural areas, rules will be firmed up to encourage investment.

The initial consultation will take place over the next couple of months, timetabled to finish next Spring, with the ambition of outlining the remedies by the Autumn and implementing during 2021.

The idea itself is of course a sensible one, even in a market as small as the UK the demands are quite varied, through implementation might be a lot more difficult. Telcos are anything but flexible in their approach to business, with changes being welcomed like man-flu.

How to get your business VoIP-connected without stumbling and falling

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Nick Johnson, CEO of Evolving Networks, looks at some of the confusion over connectivity for VoIP and how to overcome it.

Monopolies are seldom evil conspiracies but we all know where they lead – consumers end up with little or no choice and higher costs. Irrespective of industry or product, the monopoly dictates the suppliers, products, services or solutions that suit them, rather than offering what fits the consumer’s precise requirements.

That makes it interesting when disruptors enter the same marketplace and cause everyone to reassess how things are done.

In the IT and telecoms sector, new arrivals are typically more agile, have much greater focus on innovation and are able to offer the market better alternatives, either in terms of cost or functionality, or both. The established providers suddenly realise the upstart presents a real challenge to their cosy monopoly.

The mis-selling of connectivity for VoIP is a good example of this phenomenon. Established enterprise carriers have been operating in a set way for several years, using the age-old principle of fear, uncertainty and doubt to convince organisations they can’t possibly have a VoIP infrastructure with anything less than a leased line. No, to do so is just is out of the question.

This hidebound view that VoIP will only work with a leased line was certainly valid a decade ago. Now, however, with the emergence of better technology, better connectivity, and the arrival of innovators in the market with proven solutions, the customer has a wealth of other options. Gaining ground fast is multi-path ethernet delivered via an uncontended, multi-VNO access network with seamless integration of software and monitoring. It makes VoIP work brilliantly and the pedlars of leased lines are, at the very least, mistaken, when they say it won’t.

This optimised capability is especially worth considering when there is an increased push for VoIP in light of BT’s commitment to stop selling ISDN lines and public switched telephone network (PSTN) circuits by 2020. The technology is set to be switched off altogether by 2025.

Nobody can doubt that in today’s business environment connectivity is critical; there’s simply no way around that. It is used to access applications and systems, unite staff and connect an increasingly mobile workforce. As a result, quality, speed and resilience are three non-negotiables.

VoIP’s main requirement is quality. When communicating via VoIP with colleagues, prospects and stakeholders, quality is critical which means no lags, jags or inconsistent connectivity. Not only is a leased line expensive, depending on location, it certainly won’t offer the resilience and quality needed.

So, can quality and reliability be achieved without resorting to paying for a leased line? Why can’t VoIP work on multi-path ethernet (aggregated) connections like FTTC?

The answer to that question is simple: it can. VoIP works perfectly well on multi-path connections. This is welcome news for businesses, because using multiple lines means that both the challenges of quality and resilience can be resolved. The technology of multi-path aggregated connectivity delivers real benefits to organisations of all sizes using VoIP. Aggregated lines can offer increased bandwidth and capacity, enhancing data throughput speeds and application performance, while providing built-in resilience.

The emergence of disruptive companies in the market, such as those offering SD-WAN services, has changed the state of play entirely. Not only are connections more resilient, but thanks to the application of a software layer to connectivity, they can offer additional services such as fault-finding, continuous monitoring, and prioritisation of traffic. These are vital capabilities for high-performing VoIP. Of course, not every vendor gets this right. They may, for example, lay software over the top of connectivity while possessing no means of managing that inevitable disconnect between software and infrastructure layers. As a result, it’s critical to choose the right vendor.

Is a leased line a bad idea? Apart from the cost and the lack of resilience, consider the following scenario: Your business is using VoIP, delivered and supported by a leased line. There is a fault on the line and all connectivity to your organisation fails. You have no email, no access to cloud-based applications and, even worse, no phones.

If, on the other hand, your business was making use of a multipath aggregated FTTC connection, you would never need to worry about resilience. Due to the nature of the multi-path connectivity, there are numerous connections being aggregated together from different platforms, presented as a single virtual connection. If one line from one provider fails, there is another one (or more) to pick up the slack and ensure connectivity is uninterrupted.

Stimulating a mind-shift from established assumptions is never easy, but it is necessary to push the industry forward. When we examine connectivity, it’s clearly no longer sufficient to do the same things we’ve been doing for the past ten years. The market has moved on, end-user and business requirements have become more demanding and new ways of tackling fast-emerging challenges are urgently required.

Telcos are still misleading consumer in broadband ads – FTTH Council

The FTTH Council Europe has written an open letter to various regulatory bodies bemoaning the care-free attitudes of telco marketers and PR ‘gurus’ when promoting their services.

This is of course not a new issue being raised by the FTTH Council, but it is a persistent one. The wider story is the telco’s ‘creative’ relationship with the truth in advertising, though the problem seems to be greater in the world of fibre connectivity.

“Misusing the word fibre in advertisements prevents the consumers from making an informed choice about the products which are available to them and risks hindering fibre take-up,” FTTH Council Europe President Ronan Kelly states.

“Where consumers know what they can choose from and understand the difference in performance between fibre and copper-based connections, they consciously choose fibre: the degree of satisfaction of FTTH end-users is substantially higher than recorded for any other Internet access technology in Sweden and 94% of non-FTTH users would consider subscribing to FTTH if it was made available in their area.”

Perhaps one of the biggest issues is the consumer does not need to care that much for the moment. As most broadband services are sold on speed, fibre is largely un-necessary. Your correspondent does not have a full-fibre broadband connection for the moment, and nothing comes to mind when thinking about poor or sub-standard performance. However, the issue is tomorrow’s world of connectivity.

Our digital lives are becoming more demanding of connectivity, and while there might not be many consumer services which explicitly need fibre-performance today, this will not be the case tomorrow. However, if telcos are using misleading advertising to sell copper-based services, the consumer will soon decide there is no material difference. Accusations will be thrown towards the telco when connectivity standards fail to meet the demands of tomorrow’s services, though it will only be the telcos fault for pitching the two products as more-or-less the same.

The other point which is worth making is that misleading advertising is wrong. No question about it. Unfortunately, the ‘creative’ relationship with transparency is a bad habit the telcos seem to be struggling to break free from.

Just as we have rid ourselves of the ‘up to’ metric, which was very little other than dishonest, claims of ‘fibre-like’ or ‘fibre speeds’ are still in the industry. The consumer is paying honest money to be informed, and there should not be a requirement to fact check the claims of telcos, or any other advertiser for that matter. We’re surprised this point even has to be made.

What is worth noting is the broad-brush here. There are of course honest telcos, while there are also regulators who are working hard to combat the misleading claims. The Advertising Standards Agency (ASA) in the UK has re-worked the rules to ensure telcos can only claim genuine average speeds in advertising, though its research claims ‘fibre’ is not a top priority for consumers who viewed the term as a buzzword to describe speeds. Little has been done to stomp out the misleading use of ‘fibre’ therefore the telcos are free to compound the connectivity misunderstanding. It’s short-sighted, though this is not the first time we have said this about a public organization.

“Acting on misleading fibre advertising is in the interest of all European citizens and businesses but is also in the interest of Europe’s global digital competitiveness and sustainability,” said Kelly.

“Therefore we urge Member States, National Regulatory Authorities and BEREC to take action both individually and collectively to prevent misleading fibre advertising. This will contribute to unlocking the investment potential in fibre across Europe as well as to ensuring that consumers can make well informed choices based on genuine, transparent information.”

UK Gov reserves £6.8bn to realise 5G dream by 2027

The UK Government has released a report which outlines £600 billion investments in national infrastructure, including £6.8 billion to make 5G a reality by 2027 and nationwide full fibre coverage by 2033.

The National Infrastructure and Construction Pipeline 2018 is much more than digital infrastructure, though it is nice to see a hefty chunk of change being directed towards tomorrow’s connectivity challenges. Over the next three years, the plan is to fund 11 digital infrastructure projects and programmes with a total value of £6.8 billion nationwide full fibre coverage by 2033 and 5G deployment to the majority of the country by 2027.

What is worth noting is not all of this cash will be coming from the public coffers. Of the total, it appears the government will be providing £700 million of new investment, while the rest will be sourced from private investment and public-private partnerships, or has already been allocated.

Some of the projects noted in the pipeline include Virgin Media’s Project Lightning (which won’t receive any public funding), BDUK’s rural full-fibre programme will receive £200 million across the three years, while £529 million will be directed towards 700 MHz Clearance Programme, which is expected to be completed by May 2020.

It might also be worth noting these are not new projects, and not all of them will be receiving additional funding. This report seems to be an effective summary of the major programmes and initiatives the government is involved in.

“We are committed to renewing our infrastructure to drive economic growth in all parts of the United Kingdom,” said the Exchequer Secretary to the Treasury, Robert Jenrick. “Over the course of this Parliament, investment in economic infrastructure will reach the highest sustained levels in over 40 years. And as the pace of technological change accelerates, we are stepping up our commitment to digital infrastructure, use of data to drive greater productivity and embrace new methods of construction.”

In terms of the programmes which have been identified, they are as follows:

  1. Virgin Media’s Project Lightning, a project to extend the firm’s fibre-rich network to approximately four million additional premises over the next five years. This project will receive £1.8 billion in funding over the three years, though none will come directly from public coffers
  2. The 700 MHz Clearance Programme, which aims to clear this important frequency band for mobile broadband and compensate current license holders for the loss of spectrum, will have £529 million, all of which will come from direct government investment
  3. BT’s FTTP and 4G expansion plans will receive $3 billion, all of which will come from private investment or public-private partnerships
  4. Various alt-nets, such as CityFibre or HyperOptic, will receive funds through private investment or public-private partnerships totalling £1.5 billion
  5. Mobile upgrade work has been highlighted, costing a total of $4 billion from 2017-2021, though the government will only be contributing £34 million
  6. BDUK’s superfast broadband programme will receive £337 million across the three years, though it is worth noting this is a longer-term programme which has been receiving funding since 2012
  7. The Digital Infrastructure Investment Fund, has already received £400 million, which will be matched by private bodies, to invest in new fibre networks over the next 4 years
  8. BDUK’s local broadband programme has been included but it will not receive any additional funds through the next three years
  9. As with above, BDUK’s rural programme will not receive any additional funds
  10. The 5G test beds and trials have also been included in the list, though it seems the £200 million already allocated is deemed sufficient
  11. CityFibre’s full fibre programme will receive £2.5 billion in funds, though this is through private investment or public-private partnerships, and this investment has already been accounted for in previous years

The report is essentially a report card to hand out to various stakeholders to give greater transparency into how the government is spending tax-payers cash. With the Future Telecoms Infrastructure Review unveiled in July, and promising great things for this small island, it is nice to get a bit more clarity on how the grand connectivity ambitions are going to be realised.

TalkTalk launches subsidiary devoted to fibre roll out

UK ISP TalkTalk is so devoted to rolling out fibre that it has launched a new company – FibreNation – devoted entirely to that.

Apart from the statement of intent this move is noteworthy in so much as it signifies a new, serious competitor to Openreach and Virgin Media in the areas it will operate. It seems to be initially focusing on Yorkshire, but intends to eventually connect three million homes and businesses to ‘full fibre’.

The company will operate as an Openreach-style wholesaler and has apparently already signed up Sky as a customer, which must be delighted to have an alternative to Openreach for its wholesale fixed line needs. The other initial customer, of course, will be TalkTalk itself.

“We’re delighted to launch FibreNation and set out our plan to deliver world class broadband to three million homes and businesses,” said Tristia Harrison, Chief Executive of TalkTalk. “For too long, Britain has trailed the rest of the world when it comes to broadband speed and reliability. We’re determined to change that and invest in the faster, more reliable broadband Britain deserves. This is just the beginning of our plans to be at the heart of Britain’s full fibre future.”

“Investment in ultrafast fibre broadband is crucial for the economic and social vibrancy of our county,” said North Yorkshire County Councillor, Carl Les. “We will be coordinating with TalkTalk through our streetworks team to minimise disruption from the works and ensure this is delivered smoothly so residents can enjoy the benefits of faster, more reliable broadband.”

The leadership of this nascent venture seems to be a bit of a work in progress. It will be chaired by former BT and Telecom New Zealand exec Paul Reynolds but TalkTalk COO Mark Bligh seems to have decided at the last minute not to be its CEO, with that role being taken by Neil McArthur. TalkTalk rather cryptically spoke of Bligh pursuing other opportunities, but he’s still listed as COO on its website and on LinkedIn.

In other news TalkTalk announced a solid set of quarterly numbers, implying some of the turmoil of recent years is behind it, and announced it will be moving its HQ from London to Salford, Manchester. It gave no especially specific reason for the move, but it’s presumably cheaper than London and will be much nearer to all this northern fibre it’s investing in.

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.