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Have accountants put paid to from distribution points?
Thursday 12 May 2016 10:15:45 by Andrew Ferguson

Just a week since the BT Group highlighted their ambition to deliver 2 million FTTH lines and 10 million (the figure was originally announced in July 2015) it is being reported that the element of the roll-out will be cabinet based rather than distribution point based according to BT's Chief Information Office, Peter Bell who was talking at a Gigabit Europe Event.

For many this represents a massive climb down but importantly BT had never confirmed which deployment method it would use and the trials have explored various methods and it is not rocket science to realise that deploying from a cabinet that already has mains power to it would be more cost effective. The downside is that the complaints that BT just keeps making the faster go faster will be thrown around even more than usual. Nothing in the comments suggests the FTTH roll-out is in danger, and it is possible that we may see the active kit at the cabinet, and the distribution points that serve business clusters benefit from the FTTH option, in the expectation that since business has been making the case for faster speeds it will see greater take-up.

So if BT does stick to a pure cabinet based roll-out can it deliver 10 million lines? Well the rough and ready answer appears to be yes, the performance of is evolving but a reasonable estimate from October 2015 was that when co-existing with VDSL2 will provide 300 Mbps out to 250 metres and 100 Mbps to just shy of 400m. Pulling together the data from our coverage model we calculate that 41% of UK premises are within 250m of their cabinet which is 12 million premises. For those keen to do their own speculation on what might happen the current line length data for premises to cabinets that are model generates is below.

Distance from cabinet (metres)Number of premises% UK premises
< 100m 3.2 million 11%
< 200m 8.9 million 30.6%
< 250m 12 million 41.5%
< 300m 14.9 million 51.5%
< 400m 19.6 million 67.7%
< 500m 22.7 million 78.4%
< 600m 24.6 million 85%
< 700m 25.8 million 89%
< 800m 26.6 million 91.6%
< 900m 27 million 93.2%
< 1000m 27.4 million 94.3%
< 1100m 27.6 million 95%
< 1300m 27.8 million 95.9%
< 1500m 28 million 96.5%
< 2000m 28.3 million 97.5%

Of course these figures are based on offering the service from all cabinets, but if performance can stretch 300 Mbps connection speeds to 400 metres then you are quickly looking at a subset of cabinets to meet the ten million line target and it will be calculations like this along with the time and motion and hardware/power costs that the accountants will have evaluated from the various trials that has probably led to a model where enabling perhaps 65,000 to 75,000 cabinets to support versus 4 million distribution points is much more attractive financially.

The ten million target has a deadline of 2020, and what happens beyond then is a big unknown, if other operators plans actually deliver the BT Group might be facing competition from 11 million or so FTTH lines and 17 million Gigabit DOCSIS 3.1 lines and it is this 'IF' that the decision makers will be evaluating.

The data does take account of exchange only lines which while it will not always seem apparent to those who missed out so far are a dying breed and thus sit in the 2.5% of lines that are an extremely long way from the cabinet or are Exchange Only based.


Posted by TheEulerID 12 months ago
It would be interesting to know where the cost cross-over point is with FTTP. We know that there is the connectorisation trial in North Swindon. It might be that (where the infrastructure is suitable) that would make more sense for properties outside range, yet which are still fairly densely populated.

I'd be interested to see how that possible 11m FTTP (surely P, not just H) assessment comes about. Is that based on a national York-style model? Reputedly that project is aimed at around £500 per premises passed, so about £5.5bn of investment.
Posted by WWWombat 12 months ago
It is obvious that a PCP-only style of deployment will be the quickest, easiest and cheapest.

But will it generate much income? You'd be selling 160 and 330 packages to people who can already get 80.

Those accountants will want to see maximised income as well as minimised expenditure.
Posted by burble 12 months ago
I'm thinking along same lines as WWWombat, just how many who already get fairly good FTTC speeds would be interested?
Posted by TheEulerID 12 months ago

It's probably essential to have some products in the "ultrafast" range or it gives a bit PR lead to VM, and that sort of thing has a knock-on effect. I think OR's customers will be heavily leaning on OR to give them some product options in that area, even if take up is initially low. Bleeding customer revenue to VM is something that has to be considered.

I'd be interested to know if this can be done just with cabinet upgrades as that would vastly change the economics.
Posted by jumpmum 12 months ago
Power cost is always the break point. DP based can only cost in if power can be fed remotely (forward or back). Even then it would be best when it serves a larger cluster of premises to get the penetration. If SFBB is now at 25%, G-fast may get 5% in 5 years time so need a cluster of 100 houses way beyond a DP size. Where such a cluster is sub 10Mb it is more likely to cost in and where sub 2Mb even 20 house may. BUT BT would have to learn to plan on detail rather than broadbrush and that is not Peter Bell's strong point!
Posted by jumpmum 12 months ago
There will be a subset where will be cheaper than a mini Cab for clusters of around 20-30 where they are closer than 400m. But these need doing now before other solutions are used. Equation then becomes should FTTP be used or and my gut says the power cost means FTTP is better and more long term.
Consequentally this may actually be good news for FTTP where lines are a long way from the cab!
Posted by TheEulerID 12 months ago
I'd agree that for those clusters of houses beyond the current cabinet reach for, FTTP will often be the more sensible option, especially in the longer term. It avoids the power issue and I'm sure a splitter is cheaper than a node. In both cases you have to extend the fibre. The one really big issue will be that final drop. That's a substantial cost and (if passed onto the customer, even partially) could be a big disincentive.

But whatever the case, I don't think OR can possibly allow VM to run off with the ultrafast market.
Posted by godsell4 12 months ago
It looks like it is now a spend of £6bn to just keep the numbers of properties where 'ultrafast is available' to be on a par or better than VM so that BT can claim they are 'doing well' to keep, OFCOM, etc quiet. Its a numbers and perception game to keep that lot quiet. The money could be better spent on getting FTTRN/DP to those below 10Mb or so. Of course the other thing BT would like is another handout from to reach those below 10Mb or so too. So you can see their logic when it come to the finances.
Posted by andrew (Favicon staff member) 12 months ago
I am lost - people moan about the dominance of BT, but now we have lots wanting to force their hand to not spend the £6bn where it wants, but on the USO type area, surely that cements the dominant position of BT even further - something that is often complained about.

The long term danger if BT is forced to ONLY do a final 5% roll-out now is that in ten years, it will have almost no customers in 70% of the UK and thus be even more cap in hand in its approach and either nationalised or ripe for a hostile takeover.
Posted by jumpmum 12 months ago
I am happy for them to spend the £6bn where they get the best return. I also know that they tend to make broad sweep decisions that miss some of the areas of best return. I still have doubts about the mass market requirment for over 70Mb speeds for Consumers ( Apart from bragging rights). Making the sub 10Mb pockets of 10-50 houses cost in is where the debate needs to be.
Some estates where everybody is within 200m & gets 60Mb+ may not give a return.
Posted by TheEulerID 12 months ago

This £6bn is private money. It's going to be prioritised towards where the economic return is highest and where it's required to protect market share.
No commercial company goes round putting it's major investments into areas where it can't get a return. That's a route to the bankruptcy courts and in breach of the directors' duties to represent shareholders interests. Like pension funds that need the yield.
Public money is a different issue.
Posted by TheEulerID 12 months ago
I should further add it's Ofcom's responsibility to set the market framework such that economic needs can be met via economic investment.

That they've presided over a system where it's difficult to justify investments in many areas is a reflection of the market model they've adopted and the regulations they've applied (although a route favoured - at least in the past - by EU regulators).
Posted by godsell4 12 months ago
@TheEulerID Yes understood that this £6bn is private money, this as you and I state, being spent for the PR. This will benefit those who are already on 40Mb or more the most, as stated by @WWWombat, the % of those that will sign up to ultrafast is going to be lower than the % of people currently on 10Mb or lower who received an upgrade. (cont)
Posted by godsell4 12 months ago
But that strategy would not produce a good number for the 'ultrafast is available' number. I expect BT and Ed Vaizey are pretty tired at explaining to, the press and the ill-informed Mr Shapps. And by the next election period, BT wants the 'ultrfast is available' number to look good compared to VM so that some knee jerk reaction does not happen due to some election propaganda.
Posted by TheEulerID 12 months ago

You can absolutely guarantee that BT will not want to be behind VM for claiming overall "ultrafast" availability (at least by 2020). I think the head scratching will be how to do it fast and as cost effectively as possible.

One thing is for sure and that's there's no way on Earth they could hit 50% of properties in the UK with FTTP in a four year window, even if money were no object.
Posted by ahockings 12 months ago
Totally arse about face and stupid.
Why spend money giving 500 meg to people who can already get 80??
Just don't get that at all.
What about all those on sub 2 meg lines, nearly 100% of whom would sign up and at above market rate..
My ADSL is not fit for purpose anymore.
I would pay 50 quid or more for just 20 meg.
Just something I can use properly.
Posted by TheEulerID 12 months ago

Unfortunately Ofcom tend to favour national pricing for the wholesale products in the mass market (with a few slight exceptions). What this means is that OR has no ability to raise prices to reflect higher costs/lower returns which could radically change the market conditions.

If this affected OR only, it might be one thing, but it's also a disincentive for other network investment as they have to compete with low pricing.

I don't think Ofcom will change this as it's a hot potato.
Posted by jumpmum 12 months ago
OFCOM are thinking of putting a charge control on Fibre access from next year see
This will restrict the price in Rural areas to the cost that an efficient operator could provide in the commercial areas. This will prevent higher prices being charged.
Posted by WWWombat 12 months ago
Hey chaps. I think some are reading too much into this £6bn figure.

Go read again. It is business-as-usual capex, over 3 years, for both Openreach and EE. It isn't just for G.Fast.

Capex for Openreach alone for the last 3 years was £3.5bn. Within this total, BT reckoned capex for the NGA rollout was running at £300-400m per year.

BT have already said that they expect to include G.Fast expenditure within their normal budget. Maybe you should only expect around £1bn to be spent on NGA2.
Posted by WWWombat 12 months ago
"Why spend money giving 500 meg to people who can already get 80?? Just don't get that at all. What about all those on sub 2 meg lines?"

Commercial realities will prevail.

Both are risky investments which might not make a return. One apparently an acceptable risk, the other not.
Posted by WWWombat 12 months ago
@Euler, @ahockings
Ironic, isn't it. Even if you are willing to pay more, or commit to longer contracts, Ofcom still make it impossible for a provider to serve you.
Posted by _Mike_B_ 12 months ago
G.Fast is backwards compatible as well, so we may see some new cabinets that are G.Fast and VDSL2 compatible from to outset. Don't forget they will need to add infill cabinets to meet coverage targets so you'll start to see new cabinets where there wasn't one previously.
Posted by rtho782 12 months ago
Excepting areas where there is sub loop unbundling, could BT not bin VDSL and switch everyone over to G.Fast (with 40/2, 40/10, 55/10, 80/20 speed caps as appropriate) thereby meaning there was no need for VDSL coexistence, and meaning you can get 100m out quite a bit further?
Posted by TheEulerID 12 months ago

I think a forced migration to would be rather disruptive. Among other things, who's going to pay for all the new modem/routers and coordinate the changes at the customer level? OR don't own the customer relationship and I can just imagine what the ISPs might make of being required to do it.
In principle it would make complete sense to rethink the entire ANFP round cabinet services (it would be very useful for the proposed USO), but I think that the need to maintain co-existence is going to limit what can be done.
Posted by Bob_s2 12 months ago
GFAST seems to be another dead end. It only really benefits those in the largest cities and towns and who already get quite high speeds. I don't think this is really going to go anywhere. WE need a solution to getting far better speeds to most of the UK. The so called rural areas most of which are not a few cottages in the middle of nowhere but are actually quite large towns. So far BT is just continually stalling and is offering no solution and remember even if they started now it could take several years to roll out. The UK is yet again being left behind
Posted by godsell4 12 months ago
@Bob_s2 quote:
"GFAST seems to be another dead end."

That is a very absolute statement. You might want to qualify it in some way, such as 'if only deployed from the cabinet'.
Posted by rtho782 12 months ago

Even if it's a completely full 288 line cab, and BT pay £30 each for G.Fast modems in bulk (equivalent modems to the HG612, needing a router to be paired with), then it would "only" cost them £8,640 per cab to replace all the old VDSL modems with G.Fast ones. This is likely to be minor compared to the cost of all the line cards etc.

Posted by rtho782 12 months ago
Of course, some of the newer isp routers may not support connection to a modem, but this is probably a smaller proportion of the installed base.
Posted by PaulKirby 12 months ago
Maybe they should change the name from G.FAST to something more correct like G.WOULD_BE_FAST_IF_YOU_ARE_NEAR_THE_CABINET.

I now think its a complete waste of time and money if its going to be located where the cabinet is, most people wouldn't get great speeds.

And for them to also say "BT intends to reduce the number of locations serving by 94-97%." so basically nearly nobody will get it, its starting to be like FTTP first being down as 25% of the UK to now 5% if we are lucky.

Nice going BT.
Posted by Somerset 12 months ago
@Bob_s2 - do you have some examples of 'actually quite large towns'.
Posted by WWWombat 12 months ago
Maybe they should change the name from G.FAST to something more correct like G.WOULD_BE_FAST_IF_YOU_ARE_NEAR_THE_CABINET_AND_BY_2025_WE_HAVE_STILL_ONLY_PUT_THE_DARN_THINGS_AT_THE_CABINET.

I reckon that what we can currently see out of G.Fast isn't the end result, and that there's still a decade of development progress to come. There's plenty of time to move closer to homes, even if they only /start/ at the cabinet.
Posted by TheEulerID 12 months ago

I doubt very much that the ISPs would go along with that approach (and the two box solution is inconvenient). Most likely ISPs would wish to re-equip with their chosen backward-compatible router/modem (which I'm sure they are working on) and then there's those customers who have their own equipment to deal with.
There's a fair amount of backward and forwarding of all this stuff with customer communications and so on. I could see costs in the £80+ per line region plus whatever the cabinet upgrade cost would be).
Posted by PaulKirby 12 months ago
Well, the way I see it, G.FAST was to be the option between FTTC and FTTP, but with a cost close to FTTC and speed of current FTTP (i.e. 330/30 etc), but it now seems like a glorified FTTC for people close to it and people too far from it are still being shafted.

Also don't forget only 3 to 6% will ever be getting G.FAST, so what a waste of budget researching this tech.

But yeah lets hope its a good start that doesn't go to waste.
Posted by andrew (Favicon staff member) 12 months ago
How do you work out that 3 to 6% will be getting ever?

The stated goal to date is 10 million.
Posted by CarlThomas 12 months ago
I suspect it comes from this quote: "BT intends to reduce the number of locations serving by 94-97%."

Which of course means serving from cabinet rather than DP, not reducing premises passed by 94-97%.

Posted by PaulKirby 12 months ago
@Andrew staff & CarlThomas
Well it was this:

BT's CIO, Peter Bell, publicly confirmed what the industry has speculated since last spring: BT is not planning fiber to the distribution point. was designed for distribution points, up to 16 homes very close to the DP. That was BT's plan until the budget people got involved. Now, because of budget limits, BT intends to reduce the number of locations serving by 94-97%.

Maybe I am reading this wrong, but at that point there was no mention of cabinet location.
Posted by CarlThomas 12 months ago
Yes, you're reading it wrong. He said locations servING not servED. Reducing the count of nodes by 94-97%, not the quantity of premises passed by them.

Put a node at the DP it serves that DP. Put it by the existing FTTC cabinet it serves all the premises in range connected to that cabinet.
Posted by wittgenfrog 12 months ago
The money BT is proposing (not "committed") to invest is indeed "private" money.
It's not BT's money. It's money paid to BT by its customers in return for Services, which BT has shown itself either reluctant, or unable to deliver thus far.

Posted by rtho782 12 months ago
The whole reason we needed power masking for VDSL is that it is injected into the line much further down where the ADSL signal has already dropped off.

If the Cabinet is upgraded to GFast surely we don't need to worry about coexistence, as the signals are sourced at the same place. A VDSL signal wouldn't be at any more of a disadvantage than it would be competing with another VDSL signal.

In the same way, ADSL2+ from the exchange was not power masked to improve the performance of ADSL1.

If GFast is deployed closer to the customer than the cabinet, that is a different story.
Posted by CarlThomas 12 months ago
@rtho782 as is being implemented doesn't overlap with VDSL or ADSL anyway. The band being used starts at about 20MHz, so has a 2.3MHz guard band between it and VDSL2 17a.
Posted by alewis 12 months ago
Its simply symptomatic of this country's inability to formulate a long-term plan for high-speed communications. No one party is to be blamed:
Posted by alewis 12 months ago
1. BT's institutionalised reluctance to provide residential subscribers access to high-speed communications, partially in fear that it will erode business-grade revenues; this has been the case since ISDN, then ADSL, and now fibre.

2. The Government's - of all colours and at both central and local level - inability to formulate policy: e.g. in the early days of dsl, to make dsl access an essential utility as part of planning permission, and thus fund deployment through the end-user purchase.

3. Repeating the error of 2. above, not mandating fibre to all new builds
Posted by alewis 12 months ago
4. At central level, not grasping the nettle and funding £25-£30 billion to build a national FTTP network, with an ROI of xx years, tendering for build and on-going maintenance, open to all operators. Instead, they intend to spluge £80billion on a new railway that will benefit London commuters only...

5. Allowing BDUK to be subverted via a goal-post moving tender process, allowing LGC's to be 'divided-and-conquered' by the bidders (in direct contradiction of Govt best-practice for purchasing).
Posted by alewis 12 months ago
End result? A nation of haves and have-nots, with a Govt policy of moving more and more services on-line and out of the reach of significant numbers of the populace... one only has to look at the DEFRA cock-up to see what this leads to.
Posted by WWWombat 12 months ago
Having read the same articles, and listened to what Peter Bell says in interview, I can safely say...
- Bell confirms that deployment at the DP is financially untenable, and out of the question.
- Bell doesn't say, on camera or in a direct quote, that deployment at PCP is the only option
- All he says is that nodes will be "deeper into the network", which we can assume to mean somewhere further from the home than the DP.
Posted by WWWombat 12 months ago
- The reporters might be reporting what has been said off-camera, or what has been said "off the record", but they might also merely be being cynical and reporting the worst case as they see it.
- In any case, 3-6% of 4 million is 120k-240k, which can allow for 3 G.Fast nodes per PCP.

Your quote of Bell is disingenuous. He certainly talks about the initial intent being to deploy at the DP, but missing is the reasoning as to *why* it can be placed higher in the network
Posted by WWWombat 12 months ago
It might be easy to figure where BT will start in 1 year - with G.Fast nodes at the PCP.

It is much harder to figure where they will finish in 9 years time.

GFastNews, amidst the cynicism, reports "... with BT going at 3M homes passed each year. CEO Patterson will keep going until “almost all” Brits can get what he’s calling ultrafast broadband."

9 years of 3M per year would indeed be pretty much everyone.

My connection has gone through 4 upgrades in technology in the last 10 years. 2M to 80M.
Posted by godsell4 11 months ago
If the Long Range VDSL works, and if 97% of people are within 2km of the cabinet, they can get a large number of 10Mb USO compliant connections ... again without laying fibre anywhere.
Posted by godsell4 11 months ago
The chart on shows +24Mb is available to 97% of people within 2km
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