UK government unveils its cunning plan for future telecoms

Some UK officials had a bit of a think about telecoms infrastructure and were so pleased with the outcome they wrote it down and published it.

Whitehall’s condensed telecoms wisdom has manifested itself in the form of the Future Telecoms Infrastructure Review – a 90-page brain dump full of top tips on how to make the UK better at telecoms, with a heavy emphasis on ‘full fibre’. Only this, it seems, will keep our national pipes healthy and regular.

We want everyone in the UK to benefit from world-class connectivity no matter where they live, work or travel,” said new Secretary of State for this sort of thing Jeremy Wright. “This radical new blueprint for the future of telecommunications in this country will increase competition and investment in full fibre broadband, create more commercial opportunities and make it easier and cheaper to roll out infrastructure for 5G.”

Sounds good Jezza, so let’s take a closer look. Here are the key recommendations from the report:

  • New legislation that will guarantee full fibre connections to new build developments;
  • Providing operators with a ‘right to entry’ to flats, business parks, office blocks and other tenanted properties to allow those who rent to receive fast, reliable connectivity, from the right supplier at the best price;
  • Reforms to the regulatory environment for full fibre broadband that will drive investment and competition and is tailored to different local market conditions;
  • Public investment in full fibre for rural areas to begin simultaneously with commercial investment in urban locations;
  • An industry led switchover (from copper to full fibre) coordinated with Ofcom;
  • A new nationwide framework which will reduce the costs, time and disruption caused by street-works by standardising the approach across the country;
  • Increased access to spectrum for innovative 5G services
  • Infrastructure (including pipes and sewers) owned by other utilities such as power, gas and water, should be easy to access, and available for both fixed and mobile use;
  • Ofcom to reform regulation, allowing unrestricted access to Openreach ducts and poles for both residential and business use, including essential mobile infrastructure;
  • Alongside the FTIR, Government has also published a Digital Infrastructure Toolkit which will allow mobile networks to make far greater use of Government buildings to boost coverage across the UK.

To be fair there do seem to be some genuinely useful measures in that list. Improved access to sites is something regularly called for by operators and if that, together with a significantly more benign regulatory environment, is actually delivered, then telcos will have far fewer excuses for not just cracking on with the job. Having said that the obligation for new builds to have full fibre connections could further inhibit that already feeble industry.

“We welcome the government’s review, and share its ambition for full-fibre and 5G networks to be rolled out right across the UK,” said Ofcom Chief Exec Sharon White. “The government and Ofcom are working together, and with industry, to help ensure people and businesses get the broadband and mobile they need for the 21st century.”

The ‘notes to Editors’ at the end of the press release seek to further illustrate what a great idea ‘full fibre’ (i.e. FTTP) is. In a blow to technologies such as Gfast they note that running fibre and copper in parallel is inefficient. They also reckon that ‘if we get the conditions right’ the market should deliver 80% FTTP coverage (Portugal is already at 89%), despite onlt being at 4% right now.

The company largely responsible for delivering 20x more fibre than we currently have will be Openreach. “We’re encouraged by the government’s plan to promote competition, tackle red tape and bust the barriers to investment,” said an Openreach spokesperson. “As the national provider, we’re ambitious and want to build full fibre broadband to 10 million premises and beyond – so it’s vital that this becomes an attractive investment without creating digital inequality or a lack of choice for consumers and businesses across the country.”

The report doesn’t quantify the total number of premises in the UK but it does say around a million currently have FTTP, and since that represents 4% of the total that gives us 25 million premises. In turn that means Openreach’s lofty ambition would still only get us half way to 80% so there remains a lot of work to be done.

A lot of that, it seems, will be done by CityFibre, which is aiming to connect 20% of the country to fibre by 2025. “Today marks the day the government decided once and for all to leave copper behind and commit the UK to a full fibre future, making clear that a new generation of infrastructure builders is the vehicle for delivering its bold ambition for all homes and businesses to be connected to full fibre by 2033, not just Openreach,” said Mark Collins, Director of Strategy at CityFibre.

“However, it is critical that the consumer is at the heart of this fantastic opportunity from the start, as this is the key to unlocking demand. That means avoiding price rises, ensuring switching between networks is simple and ending the years of misleading ‘fake fibre’ advertising. Getting both sides of the equation right is key to ensuring millions of homes and businesses will benefit – we now need to see the Government and Ofcom push these plans through.”

CityFibre isn’t the only independent fixed infrastructure player to cautiously welcome the report, but with an air of ‘I’ll believe it when I see it. “We welcome the Government’s statement today that a switchover from hybrid to full fibre networks could be underway in the majority of the country by 2030. But the devil is in the detail,” said Evan Wienburg, CEO of full fibre infrastructure provider TrueSpeed.

“While the Government is right to state that a full-throttle drive to nationwide full fibre connectivity requires competition and commercial investment to succeed, a fair and equitable playing field for all infrastructure providers is essential,” said  This has not always been the case. There are numerous examples of tax payers’ money being wasted by national incumbent providers building FTTC/FTTP networks in areas where privately funded infrastructure providers have already deployed.”

Coinciding with the publication of this report is the formation of a pan-European alliance of indie fibre providers, including CityFibre. Its aim seems to be to promote the wholesale-only model and make sure fibre means fibre in broadband advertising. The alliance doesn’t seem to have a name yet but something like the Fibre Union of Connectivity Kings might do the trick.

At the very least this report and its recommendations give outfits like CityFibre a concrete set of parameters to refer to when embarking on one of their regular moans about how unfair the UK infrastructure market is. It looks like the government is committed to doing everything it can to encourage fibre investment and it should definitely be held to account for that over the coming years.

The Openreach virtual dark fibre service finally sees the light of day

Six months after proposing a compromise between full dark fibre access and full managed service, Openreach has formally launched ‘virtual dark fibre’.

The proper name for this fibre wholesale service is Optical Spectrum Access Filter Connect and the thinking behind it was explained to us by Openreach General Manager of High Bandwidth and Passive Services, Darren Wallington, in October of last year. In essence it aims to combine the service assurance and response times of a managed service with the scalability and flexibility sought from dark fibre access.

“We’ve re-engineered our high-bandwidth optical services to give our wholesale customers far greater flexibility at a fantastic price,” said Wallington. “OSA Filter Connect allows providers to grow their needs affordably, at their own pace and using their choice of innovative equipment.

“By innovating a virtual dark fibre service, we can give customers that extra flexibility whilst still being able to monitor our network and respond to faults and issues proactively. With a regulated dark fibre access product, we would’ve literally been left in the dark with no monitoring capabilities and significantly longer service interruptions due to the reactive nature of fault reporting, but this means we can commit to a national five-hour response time.”

Pricing seems to be one of the things Openreach has worked on a fair bit on the last six months, much of which have been spent in what Openreach characterizes as ‘proper, constructive engagement’ with UK stakeholders. Additionally it has received a significantly increased level of direct lobbying from MNOs, keen to get ahead of the game on 5G fronthaul and backhaul.

“We’ve listened closely to our customers,” said Wallington. “They wanted something that would address the perceived failings of a ‘one size fits all’ regulated product and they’ve helped us to shape the product we’re launching”

“Both large and small customers told us they wanted a service that offered more competitive high bandwidth pricing with low incremental scaling costs. They also wanted more flexible and configurable services that give them more control, the ability to support fast evolving technology – like synchronization, and more efficient use of space and power.”

It’s not for us to say whether or not this is the right solution to the dark fibre access issue, but it does seem like a good-faith attempt by Openreach to balance a number of different factors and needs. We’ve copied the new pricing tables below to help you make up your own mind.

 

*Pricing – OSA filter connect prices below, note the 5 year term variant is less than our original consultation range

This provides CPs with a 10GB managed service with spare filter ports that they can use to scale to higher bandwidth by themselves with no additional costs from Openreach. We will continue to offer additional Managed Wavelengths for those CP’s who prefer a managed service at very competitive price points.

Product Minimum Period Connection £ Exc VAT Rental per annum £ Exc VAT
OSA Filter Connect FSP3000 – 12 month 12 month £15,550 £7,845
OSA Filter Connect FSP3000 – 36 month 36 month £12,233 £6,276
OSA Filter Connect FSP3000 – 60 month 60 month £12,233 £5,775

* Can be upgraded to 20Gb without a site visit

 

EAD 10Gb will see connection prices reduced by up to 32% and rentals by up to 53%

At the same time the 5 year term variant will now in effect make be a 3 year term product, as we’ve set the early termination charges for Year 4 and 5 to zero.

Product Charge type Current Price New price for 3 April 2018 Price reduction
EAD 10000 Connection £5,990 £5,590 -6%
EAD 10000 Rental £10,500 £4,980 -53%
EAD 10000 (60 month minimum period) Connection £5,990 £4,090 -32%
EAD 10000 (60 month minimum period) Rental £8,400 £4,380 -48%
EAD Local Access 10000 Connection £5,990 £5,590 -6%
EAD Local Access 10000 Rental £7,500 £4,146 -45%
EAD Local Access 10000 (60 month minimum period) Connection £5,990 £4,090 -32%
EAD Local Access 10000 (60 month minimum period) Rental £6,000 £3,648 -39%

 

Dual Fibre mainlink, the headline rate will be reduced from 37.2p to 24p

OSA Main Link charge feature Current price (pence per meter) Price on 3 April 2018 (pence per meter)
Main link per metre or part thereof  37.2 24.0
Main link + Standby link per metre or part thereof  82.8 57.6
Diverse main link per metre or part thereof 42.0 28.8

 

Nokia chips in to raise optical network capacity limit

Networking vendor Nokia is increasingly starting to look like a chipset company, with its third major chip launch in the past year.

This one is intriguingly called the Photonic Service Engine 3 (PSE-3), because it’s all about pushing optical network capacity to its theoretical limits. If you think that doesn’t sound quite science fiction enough then get a load of this: the PSE-3 chipset is the first coherent digital signal processor to implement probabilistic constellation shaping (PCS).

As you would expect Nokia has been working on PCS for some time, and this chip would seem to be the culmination of its efforts. The technology is designed to push the Shannon Limit, which defines the maximum theoretical capacity of a communications channel. It generates wavelengths that are more resilient to noise thus, claims Nokia, increases capacity by 65% while reducing power by 60%, which seems significant.

“This is a breakthrough in how we can maximize the performance of optical networks and, at the same time, vastly simplify operations,” said Sam Bucci, Head of Optical Networks for Nokia. “The Photonic Service Engine 3 is the culmination of a decade of research and first-hand experience building the largest, highest capacity optical networks in the world.

“By introducing this extreme and yet remarkably simple programmability, our customers can now maximize the capacity of every link in their network, whether that’s 10 km, 10,000 km or beyond. They will be able to keep their costs under control while handling the huge bandwidth demands that video, cloud, and soon 5G will be throwing at them.”

“Spark and Nokia have a proud partnership delivering optical innovation in New Zealand and ensuring our network stays ahead of market demand,” Rajesh Singh, GM Value Management and Procurement, Spark New Zealand. “Building on our 2012 introduction of 100G transport and 200G in 2017, the new Nokia Bell Labs powered PSE-3 technology will allow Spark to plan towards 400G and 1Tb services supporting the significant predicted traffic demands of 5G, video, business services and IoT. We’re very excited about the world leading capability of the Nokia PSE-3 to help us meet those demands and at the same time reducing the cost per transported bit.”

This latest launch, when grouped with last year’s FP4 chip announcement, would appear to be giving Nokia a strong offering in the fixed line market with its own silicon as a significant USP. Looking back at MWC, while Nokia had plenty to say about 5G radio, its single biggest differentiator appears to be its fixed line portfolio, to which this latest announcement is a further contribution.

In other news Igor Leprince, who headed up the Nokia Global Services silo for a while, seems to have paid the price for his unit’s underperformance. Pausing only to hand over the reins to his previous head of sales – Sanjay Goel – Leprince will be updating his LinkedIn profile and pursuing other opportunities at the end of this month.

Assuming a lack of sales was a contributing factor to Leprince’s sudden interest in the broader vocational marketplace, replacing him with the person most responsible for those sales, such as they were, is an intriguing move. But what do we know and we wish Goel all the best.

TIM reviews fixed-line spin-off options

Telecom Italia has announced it will start reviewing a potential spin-off of its fixed-line business to address concerns of the Italian government and offer more freedom in the content game.

The statement follows a board meeting called to discuss the 2018-2020 Business Plan and approve the 2018 preliminary budget. As the network is classed as a national interest, the government has been peeking into dark corners of TIM, which might not be appreciated by stakeholders who just want to make a bit of money.

“Over the coming months, the management will continue to examine various hypothesis to establish whether network separation is needed to address Institutions input and to unlock value,” TIM said in a statement.

Reading between the lines, some might assume this move is an effort to keep the Italian government at arm’s length. With Vivendi exerting more control over operations at the TIM, government officials have started getting twitchy over its critical infrastructure. Of course, who would want to be thinking about such trivial matters over a long-lunch. Politicians need to be able to appreciate fine food without being bothered by something like running the country.

By separating the two organizations, Vivendi TIM might have more freedom to explore new revenue streams, potentially righting the wrong of connectivity commoditization. The Italian government has been nudging the business along this route for some time, though whether this accelerates upgrade plans remains to be seen. Perhaps the fixed-line business will simply become the ugly sister of the Vivendi TIM family.

That said, this could also be viewed as a stalling tactic, appeasing a government which has proved complicated, until elections next May. It is believed the elections will bring about a change in government, therefore a cynic might question whether there is any intention to separate the two business units, but Vivendi TIM is simply hoping for a more ‘co-operative’ administration.

On the other hand, Vivendi TIM considerations might be genuine, and the country could be heading down to the same set up as we have in the UK with BT and Openreach. And we all know how well that has been working out recently.

Openreach proposes dark fibre compromise

Having successfully resisted pressure to provide full dark fibre access to high bandwidth customers, Openreach is proposing a managed but scalable alternative.

Back in the middle of 2016 Ofcom decided Openreach should offer dark fibre access (DFA), but the latter referred the ruling to the Competition Appeal Tribunal, which overruled. Openreach accordingly pulled the plug on DFA, but promised to come up with an alternative.

In an interview with Telecoms.com, Openreach General Manager of High Bandwidth and Passive Services, Darren Wallington explained that alternative has been presented to Openreach customers this week and takes the form of OSA Filter Connect. OSA stands for Optical Spectrum Access and, in essence, this proposal aims to decouple connectivity and scalability. There will now be a one-month consultation period, the results of which Openreach aims to respond to by early December.

OSA itself has been around since 2009. It’s designed for B2B high bandwidth uses such as financial services, datacenters and public sector as well as optical backhaul. Historically it has been a fully managed service but it seems that customers want to be able to scale their bandwidth independently.

The diagram below illustrates Openreach’s proposed solution which combines at least one managed wavelength (the yellow/purple lines) but then all the other wavelengths are controlled directly by the customer. Currently OSA has 4 and 32 channel options, but Openreach intends to introduce 8 and 16 channel ones too. The technology currently supports up to 10 Gbps per channel but expects to support 100 Gbps at launch, which would, in theory, enable a bandwidth of over 3 Tbps.

Openreach OSA Filter Connect

We asked why Openreach is so resistant to DFA and Wallington explained the biggest drawback concerns response and repair time. While Openreach itself has at least one channel open it can monitor the network and commits to a 5-hour response time, but it has provided evidence to show that in the case of DFA the best it can offer is 18 hours.

Regarding the historical allegations that Openreach may not treat all its customers in the same way Wallington pointed to its Equivalence of Inputs obligations as well as the high level of scrutiny it faces from the likes of Ofcom. On the matter of pricing he was keen to point out how competitive the high bandwidth market is, and with the likes of Colt, Virgin Media, Verizon and Vodafone among its competitors, that’s hard to argue with.

Wallington said the proposal appeared to be warmly received by customers and if the consultation results in a green light OSA Filter Connect could be live as soon as 1 April 2018 and will even be backward compatible. There have been many legitimate grievances levelled at BT/Openreach by its customers in the past, but this comes over as an honest, well-intentioned proposal to resolve their concerns and deliver a solid solution. Let’s see if those customers agree.