The commercial boss of TalkTalk has warned that BT is trying to rebuild its monopoly in the UK and is using under-par broadband technology to do this. BT are currently rolling out fibre-based broadband throughout the UK with plans to reach two thirds of the country by 2015. Only around 4 million homes are currently planned to get access to full fibre-to-the-home broadband services which will offer future proof services for many years to come. The majority of homes in BT's rollout will be connected by fibre-to-the-cabinet (FTTC) technology which doesn't offer as fast speeds, and relies on utilising the old copper network for the final connection to the home.
TalkTalk as one of BT's competitors are always looking at how they can get out there to offer a competitive service to BT and other broadband providers, whether that be competing on price, or service. TalkTalk have advised that they would take up services from rival company Fujitsu, who with the backing of TalkTalk and also Virgin Media, are vying to become a rival wholesale operator. Earlier this year they announced that they were looking at deploying fibre-to-the-home to around £5m rural homes and businesses, but the business model seemed to rely on using BT infrastructure underlying it. This would be what is known as physical infrastructure access (PIA), a product from Openreach that gives rival operators the opportunity to rent space in BT's ducts and on BT poles. The companies involved in this rival network believe that the prices BT want to charge for access to this are too high, with it possibly being cheaper to just duplicate the ducts and poles through their own network. This is obviously bad for rivals, consumers and tax-payers all round as if PIA was cheaper, it would lead to cheaper services. With companies currently bidding for tax-payer money to help deploy broadband to rural areas, this could lead to everyone getting less for their money.
"At all times BT is thinking about how it can recover the monopoly position that it lost many years agoI don't think that is going to represent good value for the British taxpayer."
I feel it should already have been sorted. We are playing in extra time already. Publicly subsidised projects are already being awarded.
Right now BT knows what its costs are but nobody else does. I look at it from the point of view of the taxpayer and the market and none of them is well served by having a bidding process that favours one party."David Goldie, (Commercial Director) TalkTalk Group
With the UK lagging behind other countries who are rolling out fibre, it's vital that a boost is made to ensure that in 5 years time we are not looking to spend even more money on replacing the infrastructure that has only recently been put in. Rival operators deploying FTTH could help ensure this doesn't happen, and it will probably lie in Ofcom's hands to ensure that BT's pricing is not priced excessively. BT are obviously of a different view, that they are trying to help drive broadband forward in the UK and are allowing other operators fair access, but this will likely be shown through what the final pricing for their PIA product turns out to be.
"BT has provided reciprocal wholesale access to its fibre network from the outset. This allows other operators to piggyback off our investment, while encouraging competition and the take-up of fibre services to thrive. We've also volunteered to provide additional forms of wholesale access via our ducts and poles. We expect to announce revised pricing for such access shortly."Olivia Garfield, (Chief Executive) BT Openreach