Liberty Global has declared that its extensive cable broadband empire across Europe is set to be Gigabit Ready by the end of 2018, so just two years a couple of weeks away. For anyone following the path of DOCSIS, this is no surprise as DOCSIS 3.1 is now starting to appear in some countries, but still encouraging to have a date for when we can expect to have products using it available.
For those not aware, DOCSIS 3.1 is an upgrading to the existing hybrid fibre coax network that Virgin Media has serving 49% of UK households and it will offer Gigabit download speeds and much improved upload speed options. We believe that DOCSIS 3.1 could appear quickly in some areas, but better to wait a little while and get the network and roll-out to the point where both improved download and upload speeds are an option.
How much will this cost to roll-out? Surprisingly little based on an extensive policy paper than looks at the many countries Liberty Global operate in, and the magic figure is in the €20 to €34 per property (given current exchange rates call it the same in £), the lower figure is a Liberty Global estimate, with the €34 estimate coming from a US operator deploying 3.1 already.
The policy paper at 49 pages long is something everyone involved in the broadband industry should read and there are some interesting discussions about the world leaders in FTTP South Korea and Japan. The key summary is that while Liberty Global sees a firm place for FTTP, economics often favour a mixed technology approach i.e. sweat existing assets rather than full replace, with DOCSIS having the potential for multiple Gigabit speeds in the future it has life let and the socio-economic benefits of pure fibre are not always automatic.
"Korean consumers also make narrower use of the internet than those in other countries (Figure 21), typically participating in five activities, compared to over seven in Germany and the UK, which each have very little FTTH. (Example activities are email, social networking, online banking, use of e-gov services and so on).
The European Commission has stated that:“Gigabit connectivity is already a reality in countries such as Japan and South Korea, and is translating into increasing usage of video and high bandwidth applications”.
However, in reality South Korea’s internet video use is only moderately higher than the UK (31.9 vs 23.4 GB/month per capita in 2015), and Japan’s use is far lower, at 12.6 GB/month – this despite an almost complete absence of FTTP and gigabit offers in the UK market.Liberty Global on South Korea
This is a very different view compared to the everyone is embracing Gigabit speeds and doing masses of stuff online one that is often presented, and highlights the danger of believing the PR. In the UK we are naturally sceptical of PR originating in the UK, but are seem happy to accept the good news from abroad on broadband, or speed comparison charts where the UK data is easy to show as flawed and potentially the same across the globe making it worthless.
Online Video use in the UK has been a major driver for people wanting better speeds and it looks like we are doing a lot of it, part of this is the success of the BBC iPlayer and in 2016 that was pushed further when BBC Three moved to be an online only channel.
So is Liberty Global putting FTTP on a downer? The conclusion of which a snippet shown below indicates that this is not the case but urges that care is needed, and remember that this is an operator talking about its operations across 12 countries in Europe not just the UK.
"FTTP appears not to have delivered on its promise in Japan, South Korea and Australia. It has neither given them leading domestic application usage, nor has it positioned them as global players in the applications market. Indeed, US experience suggests that very high speeds are certainly not required to be a global internet leader – average US speeds would be mid-tier by European standards.
That said, the disappointments of FTTP in Japan, South Korea and Australia (and some other markets) certainly do not prove that ultrafast cannot be a worthwhile intervention. However, it does suggest that great care is required to ensure that:
- The benefits of the intervention outweigh costs
- The benefits are delivered in the most cost-efficient manner possible
- There are not unintended adverse consequences.Lessons from Liberty Global Report
Putting our UK centric hat on, those operators rolling out FTTP now is great, please do more, those with more FTTP plans, carry on and we want more, but the message is clear deployment does not necessarily equal a flood of automatic benefits and given the UK's good levels of coverage at speeds capable of doing what the majority want benefits of expensive an FTTP roll-out may be even further from automatic. The business sector is one that where a targeted roll-out guaranteeing every business park where landlords can be convinced will get FTTP options at below Ethernet pricing could be more beneficial than a blind target of 40% of the UK.
Of course for those in the 1.1 million premises (well over two million people) where speeds of under 10 Mbps are the only affordable option now, there will be screams of give us something better now and largely they care little for the machinations of the regulatory and commercial environment they are feeling neglected and ignored and shouting louder and louder every week, and this volume is increasing such that while the size of the under 10 Mbps footprint is shrinking those with no visible plans for improvement other than the 10 Mbps USO for 2020 the remainers volume more than increases to compensate.