Will 2025 Gigabit target be missed by years?
Going from just 10% Gigabit coverage to 100% Gigabit coverage by 31st March 2026 i.e. end of 2025 is ambitious and many people have doubts that it is possible. What is difficult to predict is exactly how fast will the large operators such as BT, Virgin Media and CityFibre build FTTP networks over next few years and how much overlap will there be,.
The current Gigabit coverage level for the UK as of the morning of 27th September from our tracking is 26.86% (comprising DOCSIS 3.1 and 16.76% being full fibre) and even if no more FTTP is built by anyone and Virgin Media switches all its network to DOCSIS 3.1 this will jump to 60.4% Gigabit coverage. Virgin Media is expected to roll-out the DOCSIS 3.1 service to its whole network over the next year or so. Given the pace of FTTP roll-outs this means that 70% Gigabit coverage looks like a slam dunk for 2022.
So the question then is how much FTTP will be built in the next few years, the pace of the past couple of months suggests a further 48 percentage points will be added to the total, but we are expecting the level of overlap between for example CityFIbre and Openreach to increase in the next couple of years. Also CityFibre and Openreach in the cities will be largely overlapping with the Virgin Media DOCSIS 3.1 network which means the current overlap of around 6.6% might increase to 20% or more. The overlap between DOCSIS 3.1 and FTTP could be a lot higher e.g. in Coventry today it is running at 43%.
In short predicting the end result is incredibly difficult and projections can give widely varying results i.e. actual 100% full fibre coverage (ignoring DOCSIS 3.1) if using an optimistic model is late 2033, the more pessimistic model suggests 2039.
The reason the old guessing game of extrapolating the Gigabit target is back in the news is that the person in charge of BT Group Philip Jansen has told MPs that to hit a 2027 universal Gigabit data would need £9 billion of cuts in business rates and cost savings from reducing red tape. Without those incentives the date would slip to 2033.
One confusing aspect is that it is not always clear in statements made by industry people whether they mean full fibre or Gigabit. The confusion being that Gigabit can be delivered by full fibre, DOCSIS 3.1 or 5G (e.g. in fixed wireless or some mmWave deployments). Add to this the confusion reporters often add and it is really hard to know what everyone really meant.
Ultimately the various broadband operators will present to the politicians what they believe will work best for their business.
The big question that is still unanswered is what is actually going to be done with the £5 billion the Government has in theory set aside to fund Gigabit roll-outs in the 20% of the country where broadband operators fear to tread due to the higher costs of roll-out out and thus breaking even is a lot longer than their shareholders are willing to accept. Programmes like the Rural Gigabit Voucher scheme are simply not going to deliver 5 or 6 million Gigabit connections. One reason not a lot is happening in terms of large projects for the final fifth is the wait for a new set of State Aid rules, i.e. replacing the current rules that the BDUK projects followed.
If all the various plans and promises of the FTTP network operators do deliver and the Government finds people to build in the less commercial areas we believe that fixed line Gigabit coverage will probably reach 97% by the end of 2025, there will be some more covered by fixed wireless (mostly rural) or 5G mmWave deployments in urban areas which might push things to 99%. Closing that final 1% is going to be very difficult and you might be looking at costs of £100,000 to deliver to some of these final properties if done with commercial labour rather than community volunteers.