BT looks towards Ofcom for the future
Ben Verwaayen, the BT CEO has been talking this week about his vision of a 21st Century Network (21CN), and the regulatory environment that Ofcom is likely to impose on the BT Group. The BT press release can be found here, with more commentary over on The Register.
The 21CN vision that Ben Verwaayen is passionate about, is intended to provide an extensive broadband network out of the patchwork of networks that BT has currently. The existing networks have grown organically, and it seems the time has come to build something new from the ground up. Of course the problem with this is having the capital to invest in such a roll-out, and as a company with shareholders, to be able to pay back and make a return on the investment in a reasonable length of time. Figures of around £2.5 billion per year for four or so years have been mentioned for the 21CN roll-out.
Many will see the statements coming out of BT, as talking up the problems, and while it would seem that way, the task of building a truly national broadband network is going to be challenging to any company. It should be noted that Ben Verwaayen has also accepted that while the UK has great ADSL coverage, the broadband we have now needs to be broader. The existing infrastructure can be pushed some more, but without extensive rebuilds, the infrastructure will break eventually.
Where does Ofcom fit into this? Pretty simple really, if Ofcom decides that BT will exploit its new network in a monopolistic manner, it may move to make the construction of this new infrastructure harder. This in theory will give the other telecommunications companies time to get their networks off the ground and providing true 21st century broadband speeds. The concern voiced by BT is that if Ofcom delays major investment, we may see in many parts of the country with an ever aging network, that will be eventually just fall apart. Though if another company can provide a national network, then this is less of a problem, but it is most likely that the alternative providers will cherry pick the larger cities and towns.