Pace of Openreach full fibre roll-out may be increasing
The headline figure is that there is 1,604,178 premises where the Openreach FTTP services can be ordered from assorted retailers. This is an increase of 110,247 compared to the previous month and gives a build rate of 25,724 premises a week.
Splits for Openreach FTTP and change in category since 12th September 2019:
- 463,391 premises via BDUK/gap funded or other rural intervention (increase of 10, reality in the 6000-7000 range)
- 764,521 premises in Fibre First areas (increase of 129,876)
- 270,774 premises via New Build since January 2016 (increase of 29,784)
- 107,468 premises via commercial/old roll-out (decrease of 47,447)
The increase of just 10 premises from gap funding is clearly incorrect, the reason for this flat lining is because of the batch of new Fibre First exchanges which has also seen the old commercial roll-out shrink. If we look at some older data from 22nd September before we had changed the Fibre First exchange list the gap funded areas had shown a 2,000 premises increase in 10 days, and we know we have been adding more at a similar pace, hence the footnote suggesting it was more like 6000-7000. The growing list of Fibre First exchanges also made a dent in the commercial footprint a large chunk of this was FTTP on almost half the Failsworth exchange where lots of overlay of VDSL2 had happened but the exchange was missing from the lists.
One of the key differences with being on a Fibre First exchange is that these exchanges are expected to be at the forefront of the PSTN switch-off that will see the old analogue phone lines switch to be voice over broadband, i.e. the phone signal will originate in the retailers own hardware and all the options of VoIP become possible, e.g. higher quality calls, multiple lines.
Beyond trying to see if Openreach is building as much full fibre as they claim the next and some say a more important aspect is how much people are using it, and as part of the end of quarter speed test analysis we have looked at the Openreach based provider speeds in the four FTTP areas. The areas do include the VDSL/ADSL2+ speeds in the area, the idea being that when we look back at these graphs in a year or two we can see what impact bulk migration of people off of the VDSL2 40/10, 55/10 and 80/20 products to the FTTP equivalent has, i.e. for those hitting the maximum sync speed there will be little change but we should see the long tail of speeds flatten into a much wider plateau at the 38 Mbps, 52 Mbps and 76 Mbps points.
The profiles are different and this is not a battle about which of the four areas has the fastest median or mean speeds, but the aim is to look at how many are buying a product faster than the VDSL2 80/20 or FTTP 80/20
Gap Funded Areas
The profile shows some 13% look to be using one of the higher speed tiers, i.e. opting for ultrafast. Virgin Media cable coverage is 5.8%.
Fibre First Areas
Only 5% look to buying the FTTP products based on the 160 Mbps or faster services in Fibre First areas, but this is also one of the newest areas. As the Fibre First areas age we may see higher take-up of faster speeds, our plan in this respect is to split the Fibre First areas into their year of announcement so in 2021 we can compare the mature areas versus the very latest. Virgin Media cable coverage 85.3%.
New Build Areas
The best performing area if you want to see lots of people using ultrafast Openreach FTTP options at 22%. A higher take-up of the ultrafast option seems to make sense, since a new home and a higher proportion of families, plus you are forced into making a decision about what you do in terms of broadband rather than just carrying with an existing contract. Virgin Media cable coverage 4.9%.
One aspect of the new build areas worth noting is that unlike Fibre First they is very little VDSL2 or ADSL2+ involved.
11% observed take-up of the ultrafast options. Virgin Media cable coverage 52.9%
There will of course be some who are speed testing over Wi-Fi and are sat in the corner of their home with a poor signal and they have an ultrafast connection but we are seeing download speeds that are distinctly slow, but these variable should be similar across all four categories.
Assuming the 5% take-up of ultrafast in the Fibre First category is correct, this suggests around 38,000 live connections and is actually not massively different to the take-up from G.fast services. So at this point in time while some people will sell their soul to get a full fibre connection, the vast majority of people are not craving it, this should not be interpreted as thinkbroadband saying the full fibre roll-outs are a waste of time, but simply pointing out that at this point in time other lower speed services appear to meet the needs of many people. The time it takes to roll-out full fibre of course means that by the time the majority of people are screaming for 200 Mbps type connections it will be too late to start the roll-outs.
The other key element in the take-up equation is what other services are available and we have included the Virgin Media cable coverage figures, so for example the lower take-up in the Fibre First areas also coincides with the highest availability of Virgin Media and its 350 Mbps, 500 Mbps and soon to be 1100 Mbps options.
The economic uncertainty that abounds at present, both due to Brexit and the worries about holding onto their job as large households names seem to collapse on all too regular basis, are also likely to have people thinking twice about signing up to new contracts or looking to lock in low cost deals with an existing provider.
The big take-away should be for the increasing number of full fibre operators both big and small, that if you need high levels of take-up to sustain your business model in the short to medium term you need to do a lot of community engagement and pricing needs to be the same or lower than the price people are paying today even if your speeds are significantly higher.