Broadband News

CityFibre in partnership with Vodafone to pass 5 million premises with full fibre

Just one week after a speech from Matt Hancock MP we have a big announcement about an infrastructure provider rolling out full fibre (FTTP) to some five million homes and premises by 2025. So either the policy changes from Westminster are enough to increase certaintity to encourage deployment or what seems more likely is that the years of talking and dipping a toe in the water is bearing fruit such as this new partnership between Vodafone and CityFibre.

The plan is that the roll-out will be in phases with the first phase commencing in the first half of 2018 and reaching a total of 1 million premises in 2021. Then if everyone is happy the agreement will be extended to another four million premises between 2021 and 2025.

CityFibre already has its Gigabit city presence that builds a metro network across cities and takes the fibre to within a few hundred metres of most businesses and then partners with local broadband providers who sell the service, this deployment is not classed as typical FTTP and to date the number of customers is in the order of 5,000 to 6,000. In York a FTTP trial has been underway (initially involving both Sky and TalkTalk but Sky have fell by the wayside) and this service is being used by the public at home and is set to be expanding to thousands more homes in York.

The difference with the announcement today is that Vodafone by entering into the partnership with the benefit of a period of exclusive access to the network as it it built and in return CityFibre have a commitment from Vodafone to deliver a minimum number of sales i.e. homes not just passed but actually paying for the service. The commitment is lower in the earlier years but is said to be 20% at the end of a ten year period for the initial one million premises.

No specific towns or cities are mentioned, so we can expect further announcements as the PR engines rev up ready for a sales push once the network is ready for service. We fully expect the roll-out to focus on the existing Gigabit cities, so invariably the roll-out is going to be areas that have VDSL2, G.fast and DOCSIS services already and thus will be a massive test of whether the public want faster speeds beyond a comfortable (20 to 30 Mbps), fingers crossed some of the slow spots in the various cities will also be covered but as this is a commercial roll-out the reasons those streets have missed out previously may remain the same when the planners and accountants do their maths.

Vodafone by getting onboard with CityFibre like this is pretty much saying that will not be embracing any Openreach FTTP plans with open arms, they may of course be a passive consumer of GEA-FTTP in the future in a similar way to GEA-FTTC today but as a test of an independant Openreach the changes Government and Ofcom have pushed through have failed this test and will be a waste of time if others follow and the only major household name selling Openeach GEA-FTTP remains BT Consumer.

For those who do gain access to full fibre (and we are talking not just via this partnership) the fixed connection speed is a welcome relief if you are one of those whose FTTC was a bit flaky and while we know some have a less than perfect experience the bigger picture suggests most get along fine, hence the massive growth in streaming figures. The big improvements are that no matter how much radio interference in your area the FTTP is unaffected, thus no occassional random resyncs. What will remain the same is the issues people have with Wi-Fi and the potential for peak time speeds to not reach maximum connection speed plus all those other issues with remote sites breaking and streaming video servers not coping with the load will continue.

One thought from reading the announcement is that after some of the negative local press coverage about messy full fibre builds (and the same applies to the cable and FTTC roll-outs) Vodafone as the anchor retailer will need to ensure that the roll-out is done to a very high standard to avoid the brand gaining a poor reputation that might impact sales, plus any things like broadband hardware and Wi-Fi kit need to be top of the line to avoid the issues that plague so many that then get reported as problems due to outdated copper.

With 5G mobile around the corner and the highest frequencies needing an in home antenna to give the best speeds (i.e. house walls and insulation will block the highest frequencies, even today with the much lower 4G frequencies this is apparent with the difference between inside and outdoors coverage), the marketing is likely to also feature nano 5G cells and just maybe the prospect of Gigabit broadband for the home and multi-Gigabit 5G connectivity.

The big question now is with both Virgin Media and Openreach already committed to million or bigger sized roll-outs of FTTP how much will these overlap with todays announcement, in the world of competition the overlaps are not a problem and are the sign of a competitive market but in a world where the UK wants to be seen as closing the notional fibre gap with countries like South Korea we need less overlap.

On the topic that one shall not talk about i.e. money, there is no pricing yet only talk of a lower cost to Vodafone than regulated wholesale prices for copper networks and the TalkTalk UFO product in York which is cheaper than their FTTC products points towards agressive pricing.

Update 10:50am Openreach sent over an unsolicited comment on the news.

We welcome this news and the competition. As we’ve said consistently - investing in more Fibre-to-the-Premises technology across the UK will need commitment from the whole industry.

For our part, we’ve invested more than £11bn over the last decade to upgrade Britain’s digital infrastructure – helping it to become the leading digital economy in the G20.

We hope this plan to reach one million front doors by 2021 can complement our own programme of upgrading two million premises, which is already well under way. We have also been consulting our customers on an ambition to reach 10 million homes and businesses with FTTP by the mid-2020s, and we’ll give an update on that process before the end of this year.

Comment from Openreach spokesperson

The comment does highlight one of the squirks in the UK broadband scene, we have some screaming that full fibre is the only way and copper is useless but somehow the digital economy is one many seek to emulate. Or put another way, how many other countries have moved a national broadcasters TV channel from over the air to be an online only affair.

Comments

An interesting development however it is only a commitment to cover 1 million premises with FTTP (roughly doubling what is available today), with Voda only committing to CFH to sell the service to 200,000 customers over 10 years. So not exactly upending the market!

Of the other 4 million premises, nothing has been committed:

“Both parties have the right to extend these terms to further roll-outs reaching up to four million additional premises by 2025.”

In reality this means somewhere between 1 and 5 million premises will have three ultrafast options by around 2025, given all are likely to be covered by Openreach and Virgin too.

  • New_Londoner
  • 11 days ago

Covered by second paragraph

  • andrew
  • thinkbroadband staff
  • 11 days ago

I recently tried to order CityFibre (through one of their partners) connection for my business. The price was great but after 3 months of quotations, nodding heads and excitement they told us they can't build any further than a couple of meters from the main dark fiber connection that runs through the town. We are about 100 meters away from this and were turned down. It was an utterly pointless exercise and I think they don't even have any engineers to dig the holes yet.

  • doowles
  • 11 days ago

It would be interesting to know how much users of the York FTTP trial are paying for their connection, how this compares to the FTTC and ADSL alternatives, and whether the prices allow the project costs to be adequately recovered.

  • Michael_Chare
  • 11 days ago

Wonder no more has been in our listings for ages now

https://www.thinkbroadband.com/isps/talktalk/packages/simply-broadband-with-ultrafibreoptic

  • andrew
  • thinkbroadband staff
  • 10 days ago

It appears that Talk Talk are charging £21.70 per month for an unlimited connection, 24 month contract. That is about half Gigaclear's lowest price. Makes one wonder if this is just a very low introductory offer and whether a profit can be made. There does not appear to be a way to increase customer revenue by charging for phone calls or services such as CLI.

  • Michael_Chare
  • 10 days ago

PS thank you for the link.

  • Michael_Chare
  • 10 days ago

Additional revenue will come from the subscriptions to paid TV content.

Also CityFibre pricing for consumer should be pretty aggressive since their model is that an anchor tenant and business use pay for the core in each city, thus the FTTH pricing only has to recover the 100-200m that the home based roll-out has to stretch from the core.

In short, the money in not in X million consumers but in 50,000 business connections.

  • andrew
  • thinkbroadband staff
  • 9 days ago

Overlaps will stifle competition in the longer term.
If I have Openreach, Virgin fibre and CityFibre passing my premises, there is competition to get my inital custom, but having paid for the connection to one set of cables I shall not be able to switch to a provider using a different set of cables unless I pay a further installation charge, with concomitant disruption in my premises. Therefore having got my business initially, I am a captive customer for one of the providers, whereas if they all use the same cables I can easily switch my custom if a different provider offers a better deal.

  • pfvincent
  • 7 days ago

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