Investment by BT in fibre access essential
Point Topic is perhaps better known for its statistics on the worldwide roll-out of the various DSL technologies. They have issued a press release relating to the recent £1.5 billion fibre project BT has offered to roll-out for 2012.
"I believe investment in NGA is essential for BT, and it should generate a good return for decades to come. On the other hand, if BT doesn’t renew its local loop infrastructure its existing copper network will be worth only scrap value within 10 years,...
Fibre in the local loop combined with BT’s 21CN [twenty-first century network] project allows BT to provide a complete IP [internet protocol]-based telecoms environment to the end user. Customers should get more flexibility for less cost and dreams like seamless fixed-mobile convergence will become reality."Tim Johnson, Chief Analyst at Point Topic
To suggest that the current local loop has just ten years of life left seems radical, but consider how much things have changed in the last 10 years and it looks like a very sane statement to make. If BT delays then we may see cities going their own way on fibre roll-outs, with firms like H2O providing much of the infrastructure.
The problem with most other roll-outs and the cable networks via Virgin Media are a prime example, is that they stick to purely commercial priorities. Love or hate BT, it has at least bid for and participated in a number of projects that addressed issues like the digital divide. We are starting to see a resurgence of community led broadband projects with talk of people rolling out their own fibre, and it could be said that wireless programmes back in 2002 to 2004 formed part of the pressure on BT to enlarge its original ADSL footprint.
One reason the £1.5 billion project that BT has dropped onto the table, is as cheap as £150 per home (Point Topic calculated the £150 figure, down from £800 of previous estimates), is that FTTH (Fibre to the Home) is envisaged for areas like Ebbsfleet, the Olympic Village and other new build sites. Existing premises would be served by running fibre to the nearest street cabinet which significantly reduces the amount of copper cable making speeds of 50Mbps or more easily possible. With some 85,000 street cabinets around the UK, the work to get fibre to these will be less than full fibre to the home. The danger of a cabinet based approach is that this may only have a limited life span of ten to fifteen years.
At the end of the day BT is stuck with largely having to satisfy investors that the return on any investment will be reasonable and not too long in happening. In the past countries have spent money on large public projects during times of recession with the longer term in view. Perhaps a UK fibre roll-out should be approached from the public benefit viewpoint rather than whether it will return investors a handsome dividend alone.