Ofcom CEO says Openreach needs to be more ambitious
The pressure on Openreach to be seen to be doing a lot more in terms of full fibre roll-outs is growing, unfortunately for the operator the pressure does not come with any extra money and this increasing pressure on Openreach carries a massive risk that it may discourage more of the investment that others such as CityFibre, TalkTalk, Vodafone, Hyperoptic, Gigaclear are making in their own full fibre roll-outs and not forgetting the expansion by Virgin Media.
Sharon White the Ofcom CEO has been talking to the Daily Mail and the part that is apparently a direct quote is reproduced below:
Why should we be any different from Spain or Portugal? Openreach have made a good start but I would like them to set a much more ambitious target.
It is inexcusable that millions still do not have access to a decent broadband connection.
Now Openreach and its parent could say it did try to do more, with its USO proposal that rather than waiting to 2020 for people to be able to request a better connection would see them rolling out USO capable services ahead of that time, the downside though was that to reach 100% the date pushed more into 2021. Though the great unsaid thing around the broadband USO after the rejection of the BT offer is that with the legal USO being on-demand led you may well have people moving home in 2024 and having to invoke the USO to get a decent service.
The success story of Spain with its high availability of full fibre resurfaces but you don't have to look too hard to see that rural areas of Spain are not really that different to the rural areas of the UK. Chasing higher levels of full fibre is good goal but there needs to be a clear and total break from the technology agnostic rules of the past immediately if this is what both Ofcom and Government want and the realisation that the current plans for increasing the full fibre coverage levels massively alone is still not going to solve the rural broadband problem, since the commercial projects are aimed at urban parts of the UK. Yes full fibre removes all the distance worries around service speeds that plague xDSL, fixed wireless and mobile services but the downside is that those rolling out the full fibre end up paying out more in wages due to the time it takes in rolling out to say 20,000 premises in a large rural area rather than 100 xDSL cabinets or wireless masts, the full fibre technology itself is NOT expensive.
Some of the other reasons why other countries in Europe are doing better is that more people live in apartment blocks and some of those with the best full fibre coverage actually skipped the ADSL and cable broadband era in the 2000-2010 timeframe but opted for fibre to the building with cheap and easy to deploy Ethernet.
There is a prediction from the Ofcom boss that the existing proposals from Openreach and others will take the UK to 25% full fibre fibre coverage by 2025, we are not committing to any specific estimate ourselves since we don't know to what degree the CityFibre 5 million ambition by 2025 (1 million by 2020) and Openreach 3 million by 2020 will overlap each other. The question though is whether the UK will be truly behind well before 2025 we expect Virgin Media to be selling DOCSIS 3.1 services over its cable network footprint and by 2025 the product range is likely to be a choice 1 Gbps, 500 Mbps and 200 Mbps products from them. Virgin Media could have a coverage footprint of 60% of UK premises by 2025, and while we expect a significant overlap by the full fibre providers we might have 70% of the UK with access to Gigabit download speeds.
So yes it would be great if Openreach was to do more, but our realistic streak means that given they've not yet built the 3 million premises of FTTP, announcing another target for their aims beyond 2020 is premature. Also given how everyone hates the dominant player if Openreach was to be as ambitious as desired we are willing to bet that things would quickly end up in regulatory battles as other operators would cry foul, especially if the ultimate goal of retiring the copper network was accelerated. Removing the copper network is not the cash gold mine some have suggested in the past, but it will free up lots of duct space that is going to be needed for other operators too, since PIA and shared duct is needed to avoid constant micro-trenching in residential areas.