Skip Navigation


Another grilling for BT Group CEO by DCMS Committee
Tuesday 15 March 2016 14:55:54 by Andrew Ferguson

Today saw the BT Group CEO Gavin Patterson and Kim Mears, Managing Director, Infrastructure Delivery answer questions put to them by the Culture, Media and Sport Committee in an almost two hour long session.

The most useful item to emerge perhaps was an indication of what BT believes it may be able to do with regards to the 10 Mbps Universal Service Obligation. Two initial offers have been presented to Ofcom and will obviously be up for discussion along with what other operators believe they may able to do to help meet a legally binding USO that should take place this Spring.

  1. A fibre rich deployment would cost up to £2bn and should reach around 99% of UK premises. Fibre rich meaning a mixture of VDSL2, G.Fast and FTTH/P, with other tech helping the remaining 1%.
  2. A cheaper option likely to cost £100's of millions using a much wider range of technology including long reach VDSL and we presume this might include other options like fixed wireless, 4G and satellite broadband.
Summary of current BT USO offers

The advantage of the more expensive option based on the technology mixture would we hope mean that many of those helped via the USO would not just hit the 10 Mbps target but exceed it by a large margin, where as option 2 sounds more like one that will tick the USO box, but may mean revisiting again in 5 to 8 years if the pattern of Internet use expands greatly beyond watching one or two HD streams at a time.

It is not fully clear who will pay the cost of the USO at this time and this is why a lot of discussion is expected, but Gavin Patterson made it clear to the committee that any investment from the group to meet the USO would be tied to the 'appropriate regulatory environment'.

As things stand today we believe that 5% of UK premises only have a 10 Mbps or slower option from fixed line broadband, expressed in raw figures this is around 164,000 postcodes comprising some 1.4 million premises. Obviously the tail end of the BDUK phase 1 roll-outs should help some (e.g. around Christmas 2015 we estimated the figure to be 170,000 postcodes) and the phase 2 extension projects will eat into this greatly. What the Government decides to do with the superfast pilots for the final 5% will also have a massive bearing on the USO discussions, as if the feedback from the pilots is favourable the number needing help to meet the USO in 2020 might be down to under 50,000 postcodes representing less than 1% of UK premises. While this may seem incredibly low, we are starting to see long delayed commercial VDSL2 cabinets going live in urban areas and partially complete FTTP areas being finished, add to this the commercial roll-outs by Hyperoptic, Virgin Media and Gigaclear.

Other aspects of the session were the usual discussions on roll-outs, 7 figure postcodes, digital mapping, over building and slightly more focus this time on superfast broadband availability for SME and micro-business that has outgrown a home office. At one point a member of the Committee seemed annoyed at the choice of a Bradford business park for the new interstitial Gigabit FTTP product that is intended to bridge the gap between GEA products and Ethernet services and the call was made for that trial to be done in a much harder (rural) part of the UK.

The question over Openreach profits subsidising the spend on BT Sport was put to bed, when Gavin Patterson stated pretty clearly that the investment in BT Sport was paid for by BT Consumer out of its own cash flow. We don't have the figures, but it is rare to see a pub that offers sports TV that does not have a BT Sport is here sticker/poster somewhere, so the revenue from pubs and clubs is likely to be a big driver, in the same way it has been for Sky for a couple of decades now.

The session is available as a video or audio only stream on the Parliament TV website if you want to see what other snippets got discussed in the 90 minutes or so.

Comments

Posted by RuralWire 9 months ago
An interesting exchange of views over the proposed USO and the potential of the proposed FTTP business product. To my mind, the fact that Gavin Patterson has acknowledged that "there is an argument for a universal service obligation" and "a case for it" seems to be further evidence of the evolution of some form of realpolitik at BT Group on the issue of social and economic digital inclusion.
Posted by jumpmum 9 months ago
Interesting 90 min.

Not sure how BT would have got enough trialists in a rural area to trail the 1Gb FTTP product. Seemed to be just another winge on behalf on one MPs small business constituents, not even sure they would want 1Gb service.
Posted by gerarda 9 months ago
@jumpmum- dead easy - pick a few notspot villages and get an 80% take up of FTTP.
Posted by chilting 9 months ago
Option one would take too long to achieve and would not be good use of public or even BT's funds. Option 2 is far more attractive as long as satellite is totally excluded. The challenge is to make the alternative options of fixed wireless backed up by 4G/5G the long term solution for rural areas. By rural areas I don't just mean the final 5% but areas that are unlikely to get G.fast speeds in the future.
Posted by themanstan 9 months ago
If USO is done properly then there will be a cross subsidy component, which allows for future upgrades without significant further public investment.
Posted by craski 9 months ago
Parliament TV stream doesnt appear to be available now, it says "the proceeding is currently in private"
Posted by craski 9 months ago
stream now working again
Posted by andrew (Favicon staff member) 9 months ago
Yeah just need to skip the first few minutes to the point where the cameras were turned on.
Posted by WWWombat 9 months ago
There's also a confirmation that revisiting long lines is an aspect of the phase 2 SEP projects. No mention of either the scale of the problem, or the scales of the new inclusion.

I know we've seen a few new cabs, but it is good to see acknowledgment at a high level.
Posted by BREWERDAVE 9 months ago
I thought the most interesting point of the whole "grilling" was Ms Mears admitting she didn't know why BT Openreach failed so often on turning up on time for repairs/installs -should have been sacked on the spot!!
Posted by fastman 9 months ago
brewerdave -- clue is in the title -- Kim Mears, Managing Director, Infrastructure Delivery -- ie responsible for network Build which is what I assume the brief of the ask was -- that's nothing to do with repairs / or installs

Posted by WWWombat 9 months ago
The numbers that were given by Kim were interesting...

They were running at 1,000 "multiple missed appointments" per week. That is, subscribers who had a missed appointment for a second time or more.

Sounds a lot? It is out of a total of 200,000 appointments per week, which makes it 0.5%.

However, the missing question is: what is the chance of a single missed appointment?

Subject to a few proviso's, that likely means the rate of missed appointments is 7% (ie 7% of 7% gives the 0.5% "MMA" rate).
...
Posted by WWWombat 9 months ago
I agree with her that Multiple missed appointments are a real no-no, and the prioritisation process needs fundamentally changing there; this is one of my bug-bears.

However, I think there is something wrong with the basic staffing level if they still end up at 7% missed appointments.
Posted by betty 9 months ago
I have had 8 appointments with BT/openreach since last October,4 came to house,2 did not come to house but said they checked the line 2 never turned up, my isp got me money back for the 2 missed calls. I am still trying to get my bb up and running, but engineers report line too long, but the Bb has been working since 2005 they say it has never worked .I live in same house as my son on different line and he can get over 1 , That's good for where we live.my isp have been onto BT/Openreach and still not further forward ,now given them sons info and waiting to see what happens.
You must be logged in to post comments. Click here to login.