Nokia scores a new PON deal with Openreach

Finnish kit vendor Nokia received a boost to its fixed line business by securing a bunch of fibre work from UK network wholesaler Openreach.

Openreach is the semi-autonomous bit of BT that manages its wholesale fixed line network. As a consequence it is the company most responsible for rolling out fibre to the home across the UK, which means it needs lots of optical kit. Much of the announcement focuses on what a great idea fibre is, what with it being much faster than copper and all that, and how good for the country having more of it is.

They do eventually get to the point, however, noting that Nokia’s contribution to the Openreach fibre rollout, which is aiming to reach 4.5 million premises by the end of March 2021, will focus on deploying GPON and XGS-PON access technologies. This will futureproof the network by giving it the ability to deliver up to 10Gb/s symmetrical broadband speeds in the future, as well as giving it the latest virtualization bells and whistles.

“We’re accelerating our full fibre build to deliver an ultrafast, ultra-reliable and futureproof broadband network throughout the UK,” said Clive Selley, CEO of Openreach. “This new digital platform will help our economy to bounce back more quickly from the COVID-19 pandemic – enabling people to continue work from home, and millions of businesses to operate seamlessly online for decades to come.

“Right now, we’re making the new network available to around 32,000 homes and businesses every week, and Nokia’s innovative solutions are helping us to build it better, broader and faster. Our partnership with Nokia will be critical in helping us to upgrade the nation and hit our target of reaching four and a half million premises by the end of March 2021.”

“Ensuring everybody has access to broadband services is critical, especially during unprecedented times like these where it has become the lifeline to millions working, handling healthcare and learning from home,” said Sandra Motley, President of Fixed Networks at Nokia. “Our fiber solutions will help Openreach bring enhanced ultra-broadband services to millions of new customers across the UK today while our 10G PON technology will help to futureproof their network against whatever may come next.”

All this general talk about the virtues of fibre creates the impression that the deal itself isn’t amazingly significant. On the other hand it at least confirms Nokia’s role in the UK’s fibre network and permits the two companies involved to do a spot of connectivity virtue signalling, so fair enough.

A look back at the biggest stories this week

Whether it’s important, depressing or just entertaining, the telecoms industry is always one which attracts attention.

Here are the stories we think are worth a second look at this week:


Reports suggest the BT empire is beginning to crumble

No-one in the UK should be in the same league as BT, but poorly executed strategy has kept rivals within touching distance and now the foundations are reportedly being sold off.

Read the full story here


Microsoft doubles down on the telco cloud with Metaswitch acquisition

Don’t say you weren’t warned, telecoms industry. The tech big guns are trained on your home turf and they’re not afraid to splash the cash.

Read the full story here


Huawei threatened to pull investment from Denmark in response to new screening law

The head of Huawei Denmark sent a letter to the Danish Prime Minister indicating it would rethink its involvement with the country if special security requirements were imposed on it.

Read the full story here


Return to work messages start to appear as Twitter hands power to employees

One of the questions which has lingered over the last few weeks is whether the COVID-19 enforced digital transformation will persist in the long-term, though the answer is becoming a bit clearer.

Read the full story here


ETSI gets to work on new contact tracing app standard

With countries across Europe all trying to reinvent the wheel with their own contact tracing apps, standardization is long overdue.

Read the full story here


Reliance Jio signs a third deal to add another $1.5bn to its bank account

Vista Equity Partners has become the third-largest investor in Reliance Platforms, purchasing a 2.32% equity stake in the disruptive business for $1.5 billion.

Read the full story here


 

Reports suggest the BT empire is beginning to crumble

No-one in the UK should be in the same league as BT, but poorly executed strategy has kept rivals within touching distance and now the foundations are reportedly being sold off.

Rumours have emerged in the Financial Times to suggest BT is in private talks to offload a portion of the Openreach business unit. Australian bank Macquarie and an unnamed sovereign wealth fund have been linked in a deal which would value Openreach at £20 billion, providing cash to fuel the £12 billion broadband upgrade BT is committed to.

We’ve said this numerous times before, but no-one should be able to compete with BT. It has the largest mobile network, the biggest broadband network, five million public wifi spots, a content platform (albeit an average one) and a trusted brand which could theoretically be exported to other ventures.

This is a business with assets which could, and should, be embracing the convergence business models to obliterate competition and steal subscriptions easily, while investors roll around in cash.

But it is not dominant.

It failed to get ahead of fibre trends. It failed to build a competent content platform, instead throwing all its eggs into the sports basket. It failed to realise synergies from the £12.5 billion acquisition of EE. It failed to have the vision to create an all-encompassing connectivity giant.

There is still an opportunity to create this position, the Halo product is heavily driven by the convergence business model, but this should have been an established position years ago.

Then came COVID-19.

The coronavirus pandemic does not have the power to kill telcos, but it will expose weaknesses. BT should have been in a much more consolidated position by now but COVID-19 came at a time where it is in transition. A time where it needs to invest heavily in networks and marketing campaigns. A time where it should be enticing customers away from rivals to add valuable resources.

Yet the team is scrapping and scraping.

Share price is at its lowest since 2009. Market capitalisation has been slashed over the last two months. Dividends have disappeared for the next year. An O2 and Virgin Media presents a major competitive threat. Trading conditions are very tough right now, especially for a company which is undergoing a transformation programme to ensure competitiveness for the long-term.

Right now, selling a stake in the Openreach business would be a sensible means to source funds. BT needs cash to deliver on fibre promises and scale its 5G network, but diluting influence in its most profitable business unit which is critical for the future is not an ideal position to be in.

BT should be miles ahead of competitors and it should be in a secure enough position where it would not have to consider the sale of a stake in Openreach. But after years of content distractions, a G.Fast farce and a woeful attempt to integrate EE into the group, it is increasingly becoming a necessity.


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How UK operators are helping customers during the COVID-19 outbreak

With telecommunications now acting as the foundation for almost every element of society, how telcos react to the on-going coronavirus outbreak will be critically important.

Although the UK Government has stopped short of measures implemented on the continent, at least at the time of writing, this week has seen a much sharper response to the global pandemic. With movements becoming increasingly limited, the telecommunications networks will become more critical, but what are each of the telcos doing in reaction.

Each of the telcos have made slightly different concessions to customers, though we suspect the plans will looks remarkable similar in a couple of weeks. Each will likely learn from competitors as none will want to look like they are doing less for customers than rivals.

Vodafone

At Group level, CEO Nick Read announced a number of measures to be applied across the European footprint.

Capacity is being increased to deal with the new spikes in internet traffic, Vodafone has said it has seen a 50% increase already, while consumers accessing government-supported healthcare websites and educational resources will be able to do so without worry about data consumption.

In terms of working with the Government, Vodafone has said it will offer anonymised data, where legally permitted, to aid in tracking people’s movements and the spread of COVID-19. Government departments have also been offered the opportunity to deliver targeted text messaging where technically possible.

To assist its own supply chain, Vodafone has said European suppliers will be paid in 15 days, instead of the customary 30 to 60 days.

From a scientific perspective, Vodafone’s DreamLab, a specialist app that uses smartphones’ data processing capacity to help cancer research projects while users are asleep, will receive a £200,000 cash injection from Group to repurpose the app to support research into antiviral properties.

Elsewhere within the Group, Vodafone Italy Foundation has donated €500,000 to support the Buzzi Foundation and the Italian Red Cross, Vodafone Czech Foundation’s emergency app Zachranka is pushing out public health alerts to its 1.3 million users and the remaining business units are all creating initiatives to help young people gain access to their digital learning platforms.

Virgin Media

From March 23rd, Virgin Media’s postpaid customers will be offered unlimited minutes to landlines and other mobile numbers, as well as a 10 GB data boost for the month at no extra cost. For broadband, any data caps on legacy products will be lifted.

In terms of technicians and home visits, Virgin Media has now set-up procedures to protect its own employees. Three days before a scheduled visit to a customer’s home, a text will be sent to ask if anyone living at their property has been asked to self-isolate or has flu-like symptoms. If the answer is yes, the appointment will be re-arranged for two weeks later. 30 minutes prior to the appointment, the technician will phone the customer to ask the same questions.

Although this will come as little comfort to those customers who are in need of a technician, the precautions are completely understandable. In these cases, new customers will be sent a self-install QuickStart pack which will hopefully mean a technician is not needed. Vodafone has not responded to questions to what the plan is should a technician be the only option.

O2/Telefonica UK

Like many other telcos, O2 has said all NHS UK websites will be ‘zero rated’, meaning any data used on these sites won’t count towards a customer’s monthly allowance, while it will make efforts to help those who are not able to pay their monthly bill. Customers who are concerned about the impact coronavirus will have on their monthly income are urged to call 202 to discuss the situation.

Little has been said on what work will be done to ensure the network remains resilient during the period of heightened pressure. This seems odd, as the O2 network shut down in certain areas this week, not related to increased internet traffic or congestion. Some customers might want more reassurances considering the dependence on communications infrastructure over the immediate future.

Elsewhere in the Telefonica Group, the Spanish business unit has said it will add 30 GB of mobile data to all Fusion and Movistar convergence customers for the next two months.

BT/EE/Openreach

In response the potential of increased strain on the network, BT is seemingly not that worried; the following is an extract from the website addressing the immediate challenges:

We have more than enough capacity in our UK broadband network to handle mass-scale homeworking in response to COVID-19. Our network is built to accommodate evening peak network capacity, which is driven by data-heavy things like video streaming and game downloads, for example.

By comparison, data requirements for work-related applications like video calls and daytime email traffic represent a fraction of this. Even if the same heavy data traffic that we see each evening were to run throughout the daytime, there is still enough capacity for work applications to run simultaneously.

This is a confident position to take, though the team has also said it will prioritise emergency calls and systems supporting emergency services such as the NHS, Airwave and the Emergency Services Network (ESN), critical national infrastructure and vulnerable customers, should the network come under intolerable pressure.

The BT Group has not unveiled any new measures for consumer customers yet, though it has put in additional procedures for enterprise customers due to the increased demand for home working.

The enterprise business unit has said it will work with customers to provide short-term upgrades for network capacity, increased virtual private network (VPN) connectivity, additional conferencing and collaboration tools, as well as call routing/forwarding solutions to divert calls to home phones or mobiles.

Three UK

Although Three UK does not seem to have introduced any additional policies in respect to the coronavirus outbreak, it does already have several initiatives which could prove to be quite useful. For example, free home delivery for customers and Three Store Now, which is a live stream to connect customers to in-store assistants for demos or to discuss potential purchases.

Sky

In response to almost all major sporting events being cancelled, Sky has said it will allow customers to ‘pause’ Sky Sports subscriptions without any additional charges. With the Premier League being suspended until early April, England’s cricket tour of Sri Lanka cancelled and PRO14 Rugby postponed for the foreseeable future, there will certainly be a shortage of programming for this element of the premium TV offering.

On the broadband front, although Sky has reiterated it believes its service will be consistent, it does not need to make any announcements regarding data caps, like operators in the US, as these limitations are very rare in the UK market.

Openreach decides to connect more new builds on the house

UK fixed line infrastructure provider Openreach will now offer to connect new houses to full fibre for free on developments of 20 plots or more.

The previous threshold for freeness was 30, so that means at the current rate of building that an additional 13,000 new premises will get their fibre on the house, so to speak. Openreach says 99 percent of houses built that were eligible for this free service used it. Since the launch of its new build scheme in 2016 Openreach has connected 354,000 new homes with full fibre, implying the vast majority of builds are part of larger developments.

“We hope these new measures will provide the necessary incentive for housebuilders to adopt this future-proof technology across smaller developments so that no-one’s left behind,” said Kim Mears, MD of Strategic Infrastructure Development at Openreach. “We welcome the government’s intention – outlined in the Queen’s Speech – to amend legislation so that all new build homes are required to have the infrastructure to support gigabit-capable connections, and we will work closely with government and housebuilders on how best to deliver this.”

“The customer of today expects, in line with other utility suppliers to be provided with fast, reliable, uninterrupted service upon receiving the keys to their new home,” said Kieran Walker, Technical Director for the Home Builders Federation. “This further step improvement will assist housebuilders in ensuring their customers overall journey is positive one.

As you can see from the table below, Openreach has also lowered what it charges for 2-3 plot builds but compensated by raising the price for 4-9 plot builds. As ever Openreach is keen to stress how on-board with the government’s fibre ambitions it is and cites this move as further evidence of that. Now what about connecting those houses that have already been built too?

Ofcom promises to ‘supercharge’ fibre with four-point plan

Telecoms regulator Ofcom has proposed a four-point plan to accelerate investment in fibre networks at interest continues to gather momentum in the UK.

In what could turn out to be a catalyst to gather further momentum in the market, Ofcom has revealed a four-point plan to accelerate deployment. Interest in fibre connectivity has certainly increased across the country, though BT and Openreach have called for regulatory reform to further aid aggressive deployment plans. The plan is now open for consultation, with Ofcom set to publish its decision in early 2021 before the current rules expire in April 2021.

Firstly, caps will be placed on wholesale prices to encourage competition from new networks. Secondly, Openreach will be prevented from applying drastic discounts which could stifle competition. More flexibility will be offered in the rural regions to encourage investment however, and finally, Ofcom will deregulate Openreach’s copper products in areas where full fibre is built to help Openreach retire the network.

“These plans will help fuel a full-fibre future for the whole country,” said Jonathan Oxley, Ofcom Interim Chief Executive. “We’re removing the remaining roadblocks to investment and supporting competition, so companies can build the networks that will drive the UK into the digital fast lane.

“Full-fibre broadband is much faster and more reliable. It’s vital that people and businesses everywhere – whether in rural areas, smaller towns or cities – can enjoy these benefits. So, we’re making sure companies have the right incentives to accelerate full fibre to every part of the UK.”

Compared to other nations across the European bloc, the UK is in somewhat of sluggish position. Pointing the finger towards investments in G.Fast broadband upgrades as opposed to the more expensive, but longer-view, fibre products has generally been accepted as the main reason. According to OECD estimates, only 1.92% of total broadband connections in the UK are fibre, which leaves the state in a comparatively unattractive position.

Fibre connections as a percentage of total broadband connections
Country 2018 2016
UK 1.92 0.8
Germany 3.18 1.8
France 16.5 7.8
Poland 20.49 8.2
Portugal 45.2 32.3
Sweden 66.94 55.2

OECD Broadband statistics

“Today’s proposals appear to be a big step in the right direction to give clarity and investment certainty,” an Openreach spokesperson said. “Like the Government and Ofcom, we want to upgrade the UK to faster, more reliable full fibre broadband. We’re getting on with the job, building to 26,000 premises each week and we remain on track to reach 4m homes and businesses by the end of March 2021.

“We’ll consider the range of proposals carefully and will continue to work with Ofcom and industry on getting the conditions right to help achieve the Government’s ambition of rolling out gigabit capable broadband across the UK as soon as possible.”

Although some might question the need for such speed, it won’t be too long before applications emerge which drive data usage through the roof. Let’s not forget, in 2010 average fixed broadband speeds were 5.2 Mbps, satisfactory at the time but horrifying for the consumer of today. Average speeds in 2019 were 22.37 Mbps and it will not be long before these are considered below par.

Aside from speed, it is also worth noting that fibre broadband connectivity also offers a very useful boost to reliability.

“It’s good to see Ofcom using its powers as a regulator to stimulate competition, drive investment and improve outcomes for consumers,” said Ed Dodman, Director of Regulatory Affairs at Ombudsman Services.

“Many of the broadband complaints we handle from consumers and small businesses are to do with issues around speed and reliability, so we support proposals that will lead to improvements in these areas across the UK.”

Although the OECD statistics do not paint the prettiest of connectivity pictures in the UK, momentum has been shifting in the right direction.

From a political perspective, the idea of gigabit speed broadband has taken hold. It might turn out to be nothing more than empty campaign promises, but it has raised the issue of fibre connectivity and the digital divide to the national conversation.

Looking at the consumer, there is certainly more appetite. This will be partly down to the consumer being more educated on the different connectivity options, Ofcom rules killing off dubious and misleading fibre claims from ISPs and the price of fibre connectivity dropping in recent years.

And thanks to increased demand from the consumer, the UK fibre landscape is looking like a more attractive investment. Goldman Sachs purchasing CityFibre is evidence of this, but other financial players are becoming increasing interested in communications infrastructure as a long-term investment. Securing additional funds from third-parties is becoming a critical component of the mix, especially with more alt-nets appearing.

In the short-term, the emergence of ‘alt-nets’ should only be viewed as a good thing. More providers will create more value for the consumer through increased competition and providing the telcos incentive to invest in fibre. However, you have to wonder whether the number of alt-nets in the UK is sustainable in the long-run.

The more providers there are, the more fragmented a market becomes. Fragmentation is the enemy of scale, making it more difficult to aggressively pursue expensive investments. There is of course a risk of over-build in certain markets, though the presence of these alt-nets creates an interesting M&A future for the UK.

CityFibre is a primary example of what happens when a market becomes too fragmented. This is a company which only exists because it was able to acquire several distressed fibre players and merge them into a single business. Some ambitious and cash-rich parties might look at the potentially fragmented market in the UK as another opportunity to consolidate and create another scaled player at some point in the future.

Although this move should not be considered the silver bullet from Ofcom, it is certainly very encouraging. The UK telecoms industry has been calling for regulatory reform for some time in pursuit of greater levels of certainty as well as a more favourable investment climate in the UK.

What we have here is an excellent example of collaboration. For the digital society of tomorrow to be more than a pipe dream, industry will have to come together with the investment community and Government, presenting a united front. This proposal is perhaps evidence the rhetoric is perhaps evolving into reality.

UK Labour party pledges to nationalise much of BT if elected

A key policy of the Labour party ahead of the UK general election next month is to make broadband ‘free’ by nationalising Openreach.

Renationalising infrastructure is a core Labour policy in the run up to next month’s election and now that includes broadband. The good news for BT, and fans of property rights in general, is that Labour plans to buy the following using public funds it will get from somewhere: Openreach, the parts of BT Technology that deal with backhaul, BT Enterprise and BT Consumer. The bad news is that BT will have no say in the matter and Labour will decide on the price.

“It’s time to make the very fastest full-fibre broadband free to everybody, in every home in every corner of our country,” said Jeremy Corbyn, leader of the Labour party. “Making it free and available to all will open up opportunities for everybody, at the cutting edge of social and economic change. By creating British Broadband as a public service, we will lead the world in using public investment to transform our country, reduce people’s monthly bills, boost our economy and improve people’s quality of life.”

“This is public ownership for the future,” said John Mc Donnell, Labour’s Shadow Chancellor. “A plan that will challenge rip-off ‘out-of-contract’ pricing – and that will literally eliminate bills for millions of people across the UK. Every part of this plan has been legally vetted, checked with experts, and costed.”

Here are some of the ‘notes to editors’ from the Labour announcement:

  • Labour will deliver free full-fibre broadband to all individuals and businesses by 2030. We will integrate the broadband-relevant parts of BT into a new public entity, British Broadband, with a mission to connect the country. Labour will aim to deliver free full-fibre broadband to at least 15-18 million premises within five years.
  • This will be paid for through Labour’s Green Transformation Fund, with the costs of maintaining the network paid by a tax on multinationals (including tech giants like Google and Facebook).
  • To deliver this we will adopt a public mission to roll-out the remaining 90-92% of full-fibre across the country, as well as acquiring the necessary access rights to the existing 8-10% of full-fibre assets.
  • All current workers in broadband infrastructure and broadband retail services will be guaranteed jobs in the new public entity and be guaranteed the same or better terms and conditions.
  • There is a one-off capital cost to roll-out the full-fibre network of £15.3 billion (in addition to the Government’s existing and not-yet-spent £5 billion commitment), which will be paid for from our Green Transformation Fund;
  • The cost of bringing parts of BT into public ownership be set by Parliament and paid for by swapping bonds for shares, as occurs with other public ownership processes;
  • Full-fibre has low maintenance costs once rolled out, which can be estimated at around £230 million a year, which will be more than covered by a system unitary taxation of multinationals, which involves treating multinational companies as single entities, and taxing UK-based multinationals on the share of their global profits that reflects their UK share of their global sales, employment and assets.

Unsurprisingly such a radical pledge has provoked some robust responses, especially since McDonnell had said as recently as July that he had no plans to nationalise BT. The company itself is keeping its cards pretty close to its chest, offering only the following statement.

“It should be a top political priority to super-charge the roll-out of full fibre broadband and 5G right across the UK so we can build the digital economy of the future.  Whatever the result of the election, we’d encourage the next Government to work with all parts of the industry to achieve that. It’s a national mission that’s bigger than any one company.”

Others have been more forthcoming, however. “These proposals would be a disaster for the telecoms sector and the customers that it serves,” said Julian David, CEO of UK tech sector trade body TechUK. “Renationalisation would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT.

“Full Fibre and 5G are the underpinning technologies of our future digital economy and society. The majority of the estimated £30bn cost for Full Fibre is being borne by the private sector. Renationalisation would put this cost back onto the taxpayer, no doubt after years of legal wrangling, wasting precious time when we can least afford it.  These proposals would be a huge set back for the UK’s digital economy which is a huge driver for growth.”

“Today’s announcement highlights the importance of full fibre access for all,” said Lloyd Felton, Chief Exec of County Broadband. “However, it also shows an alarming lack of understanding about the complex nature of full fibre rollouts and the fact that, unlike by comparison the rail industry that operates rail franchises, the industry has already invested billions of pounds in building its own infrastructure over which the service is delivered, in direct competition to BT.

“This proposal would almost certainly lead to delays, or at worst, derailment of existing full fibre investment and new network rollouts. It is a broad-brush, and makes no mention of how customers would be served and supported and provides no recognition for what has been achieved by the many Alternative Network providers who are currently active in providing a competitive full fibre solution.

“The competitive nature of the current market in the UK has meant consumers already benefit from one of the lowest cost broadband services in Europe. Broadband is an essential utility and whilst we share the ambition to bring future-ready full fibre connectivity to every home and business, we believe a mix of public and private investment is the only realistic strategy to deliver the service efficiently, without the need to bring significant cost to the public purse.”

Ofcom isn’t commenting and Openreach is leaving it to BT. We understand that there is an unprecedented exchange of views taking place within the UK telecoms industry, however, and look forward to the outcome of that. We also asked a few industry experts what they thought of Labour’s plans.

“There is no denying that the UK is far from a leader in full-fibre broadband, but the market is really starting to move as Openreach’s rollout plans are complemented by a long list of alternative / competitive network providers – Virgin, Talk Talk, CityFibre, Hyperoptic, and many more,” said Phil Kendall, Analyst at Strategy Analytics.

“A survey of The Independent Networks Cooperative Association (INCA) members showed an aspiration to pass 16 million premises with fibre by 2025. If there is a role for government in this it would be to support pushing broadband coverage out to all communities, so the areas that the private market will struggle to cover profitably, not torching the whole sector.

“If nationalizing Openreach doesn’t kill off some or all of those competing providers or wholesalers then offering free fibre broadband to everyone definitely will. For the average voter, there are good optics on this – free broadband, like free Wi-Fi or free roaming, is a nice populist idea and getting the evil webscale giants to pay for it is perfect. But this is a hugely destructive attempt to fix a sector that isn’t anywhere near as broken as Labour seems to think.”

“On the face of it this is not completely insane,” said telecoms analyst William Webb. “BT was, of course, publicly owned about 30 years ago. There have been state-led fibre deployments, most obviously in Australia, and while this hasn’t gone particularly well, nor had UK fibre deployment under the current model until recently.

“There is always a tension between a competitive market, which we currently have, but which will often not deliver socially desirable outcomes; and a publicly provided service, which will deliver those outcomes but tends to have well known downsides including a lack of innovation, possibly high prices (even if these are charged to taxpayers, not consumers), slow responses to changes and so on.

“But, of course, there are massive issues. The biggest is how we would transfer out of an environment with multiple competing providers in a way that compensates all fairly, that doesn’t slow things down, and that rationalises duplicated resource. Another is the extent to which we really need fibre everywhere and whether a state-led masterplan is reactive to real needs – this was one of the biggest issues in Australia. And as fixed and mobile converge with services like fixed wireless access, intervention will spill across into the mobile arena, potentially destabilising that competitive market.

“Fundamentally, I guess, it comes down to whether you believe in state ownership or market forces. Both can be made to work. But with the market forces approach appearing to work probably as well as it could right now, changing approach feels almost certain to slow things in the short to medium term.”

“It’s great to have bold aspirations but we’ve seen how challenging they are to implement,” said TMT Analyst Paolo Pescatore. “For sure, connectivity needs to improve and so does coverage. There are so many companies laying cables and installing masts. The best way is to forge partnerships which will help lower costs for all including consumers.”

There are coherent arguments in favour of nationalising natural monopolies, but the way Openreach has been regulated alongside the presence of competitive alternative fibre providers means this isn’t one of those cases. There are just so many flaws and pieces of sloppy, wishful thinking in this proposal that if it were a different time of year we’d assume it was a joke.

Firstly there’s the costing alone. Labour not only plans to quadruple Conservative broadband spending pledges, it needs to find the cash to buy over half of BT. Despite the hit to its share price this announcement has delivered, BT’s market cap is still around £19 billion, so that’s another £10 billion or so Labour would have to dig up, depending on how fair it intends to be to BT shareholders. And as for getting US tech giants to pay for the maintenance, good luck with that.

Then you have the underlying concept of forced state appropriation of private property. If Labour is willing to force one of the UK’s biggest companies to sell half of itself to the state, at a price it has no say in, then are any other companies safe? The effect on business sentiment of moves like this is likely to be catastrophic.

But finally, as many people have indicated above, we have the extreme improbability that the state will do a better job of fibre rollout than the private sector currently is. NBN is a great example of the folly of such initiatives and once a Labour government is forced to confront hard financial realities, work on the network would likely grind to a halt.

All politicians try to bribe the electorate in the run up to general elections, but the trick is to at least make it plausible that they will be able to deliver if they do win power. This policy is not only damaging for UK telecoms infrastructure and business in general, it also has no chance of being put into practice as promised. Labour has massively over-reached with this move.

Vodafone extends broadband reach with new Openreach agreement

Vodafone has broadened its fibre footprint to Birmingham, Bristol and Liverpool after signing a new wholesale agreement with Openreach.

The Vodafone business might be primarily known as a mobile business to most, though it has been making strides into the broadband world after signing an agreement with CityFibre last year. What this wholesale agreement with Openreach looks like is an effort by Vodafone to expand its fibre footprint in areas where its primary partner, CityFibre, does not have a presence.

With this wholesale agreement in place, Vodafone will soon be able to offer fibre broadband services in 15 locations throughout the UK.

“Vodafone is committed to a full fibre future and to creating the infrastructure Britain needs to compete and win in the digital era,” said Vodafone UK CEO Nick Jeffery.

“This initiative with Openreach builds on our existing commitments with CityFibre and underlines our belief in the power of digital technology to connect people for a better future and unlock economic growth for the UK.”

As part of the agreement, Vodafone’s Gigafast Broadband service will be available to customers in Birmingham, Bristol and Liverpool on the Fibre-to-the-Premises (FTTP) network from 2021. The first phase of the Openreach rollout is currently underway and the team plans to be able to reach as many as 500,000 customers on this network by mid-2021.

For Vodafone, this is a wholesale agreement which makes sense. The partnership with CityFibre looks to be one where the terms and conditions are very favourable to both parties, however Vodafone will want to be a service provider which can offer broadband to everyone. The CityFibre deployment strategy means secondary partners will have to be sought.

As part of the CityFibre agreement, Vodafone has made a minimum volume-based commitment for 10 years which increases over the period to 20% of the initial one million premises. In return, Vodafone has a period of exclusivity for consumer fibre-to-the-home services from CityFibre for 12 months, though the time-period is nuanced depending on location and the phase of network construction.

The CityFibre deployment strategy is also a point to consider here. CityFibre is targeting small and medium sized cities, as well as larger towns. These are areas which are generally not being targeted by the likes of Openreach or Virgin Media for fibre deployment. The idea is to create a scaled challenger, and targeting areas where rivals aren’t is a perfectly reasonable strategy.

In short, Vodafone will use CityFibre infrastructure as default, and Openreach in locations where it is not available.

For Vodafone, this partnership demonstrates something which many will see as a plus; ambition. The team is seemingly attempting to expand the fibre service offering to more regions across the country, which should add greater confidence in its pursuit of making a meaningful impact on the segment.

Openreach explains why FTTP is such a great idea

A new report commissioned by fixed line infrastructure provider Openreach has concluded the UK would be £59 billion better off with full FTTP.

The report is called ‘Full fibre broadband: A platform for growth’ and was compiled by the Centre for Economics and Business Research, which likes to think it’s good at this sort of thing. The headline conclusion is that if we achieve ubiquitous fibre to the premises by 2025, UK productivity would increase by almost £59 billion, thanks to smarter ways of working and better public services.

It’s fairly common practice for analyst firms to use clever Excel models to extrapolate current trends and make forecasts and this is no exception. It seems the CEBR had a look at the effect FTTP has had in places where it’s already available and scaled that up to the whole country. It also tried to factor in other disruptive technological events such as mass ICT and even railways to get a sense of the transformative effect of everyone having faster broadband than they currently do.

As ever with commissioned research, Openreach wasn’t about to shell out for a report that concluded the whole reason for its existence is unimportant, but that doesn’t mean the conclusions should be ignored either. World class broadband does have the potential to transform society, especially when it comes to things like working from home and revitalising neglected parts of the country.

“Full fibre is a vehicle to turbocharge our economy post-Brexit, with the power to renew towns and communities across the UK,” said Openreach CEO Clive Selley. “We’re proud to be leading the way with over 1.8 million homes and businesses already having access to our full fibre network. We’re currently building full fibre to around 22,000 premises a week– which is one every 28 seconds. But we want to go even faster and further – to 15 million premises and beyond if we can get the right conditions to invest.

“Through our Fibre First programme, Openreach is now building to 103 locations across the UK and we’re on track to build to four million premises by March 2021. With the right policies and regulation, we can build a better, more reliable broadband network faster than any other country in the world and unlock the benefits for the whole UK. If that doesn’t happen, then many people will be locked out of a more connected future and the UK could lose its status as a global digital leader.”

As ever when it comes to telecoms infrastructure, the government and regulators are called on to help out with the roll-out. Openreach reckons the telecoms sector should be exempt from paying business rates for the foreseeable future, be granted better access to blocks of flats and other such buildings and get a regulatory environment more conducive to investment.

If you want to read the full report as well as Openreach’s thoughts on how the roll-out of full FTTP can be sped up then click here. To some extent Openreach is pushing at an open door here, since no one thinks faster broadband is a bad idea. This report is just part of the ongoing lobbying campaign to get the UK state to be a bit more helpful when it comes to fibre infrastructure and, presumably, to maintain the momentum created by Boris Johnson’s enthusiasm for fibre.