Is Fujitsu leaving Cumbria going to repeat across the UK?
The news that Fujitsu was withdrawing from bidding for the BDUK work in Cumbria has unleashed a torrent of concern, and the Fujitsu statement appearing in several locations adds fuel to the fire.
"We withdrew from Cumbria because we cannot currently see a clear path towards the mass market that is required to attract leading retail service providers."Fujitsu Statement
This raises serious questions about the project in other parts of the UK. In theory Virgin Media and TalkTalk had expressed support for the Fujitsu scheme, but there has been no indications since the original announcements as to how that relationship has progressed. Is the problem with trying to run an open network in the final third of the UK, that the retail broadband providers are not keen on the service.
One reason the retail broadband providers like Sky and TalkTalk may not be too keen, is that they spent millions on their LLU infrastructure, and now have invested in getting up to speed with the Openreach GEA FTTC/FTTP products, and along will come another network that may duplicate perhaps 20% of their LLU footprint. At the retail level there is the big question of what price should be charged, and whether the expected wholesale charges give room for other operating costs e.g. support and hardware and the dirty word that one dare not talk of these days: profit.
Is there a simple answer? Yes, but it is the one that many don't want to accept, and that is that the UK only has one national local loop provider, and that is Openreach. If we are to meet the Governments targets they look to be the only possibility, their solutions are not perfect, but represent an improvement for the majority. Improving competition in the local loop, may require more subtle changes to funding, to encourage new start-ups and investment from those running fibre networks across Europe (though to date most of those in Europe are city based), such as those who are already looking to provide full fibre services in small areas of the UK. These embryonic companies may grow to provide serious competition in five to ten years.