12 thoughts on “How Realistic Is BT's Fiber Broadband Plan?”

  1. Methinks you have grabbed the very end of a wonky stick. Basically, this blog post illustrates a lack of local knowledge, BT’s plans focuses mainly on the legacy olympic homes -that will be pre fitted with fibre – the densely, pre fitted (and densely populated) area from canary wharf to the city, and eastwards to Kent and its highspeed pilot. This project has the look of a “join-up and upgrade” of possibly the most densely pre-fibred parts of London and the southeast. Admittedly, upgrading the exchanges will be pricey but its hardly starting from scratch, like Verison or AT&T. I would be surprised if they overran budget.

  2. Om:

    The majority of the 10M are fibre to the cabinet using VDSL, like Embarq and AT&T.$300/home is in the ballpark considering the shorter loop lengths in the UK.

  3. I’d guess that the 10M are city dwellers. Modern British cities still have large areas where offices and apartments are adjacent. (the office next to ours changes from apartments to offices every few years).
    BT (and the late NTL) have been providing ISDN services to businesses by running fiber to the cabinet
    for years. (We have both sorts of fiber into our building).
    BT is probably just going to start offering services over this pre-existing fiber – about time too,

  4. @Corrupted Mind… good points you make, and thank you for that. Just to clarify, are you saying that those areas are 40% of the UK households. If what you say is true, I wondering if the guys from BT are kicking sand in Ofcom’s eyes and “giving concessions”. Advise.

    @ Andrew,

    They are pretty explicit in saying they are going to be building FTTP connections. I think Ofcom relief is contingent on that. And If the whole thing is entirely VDSL, I am not so sure you can eliminate the costs – labors, modem and what not entirely. I think even 10% of those homes being fiber makes the cost estimates questionable.

  5. I’m left with more questions:

    1. What is a “home”? A city or urban setting (especially in Europe) can be very dense. Hence is a “home” 1 apartment building? Or 1 apartment (unit)? If it’s per unit, one building can be 50+ homes right there. In a city environment that’s pretty easy.

    It’s getting the rural areas where you have to deploy fiber several miles to reach 1 home that it’s gets costly.

    2. Are they leasing capacity? They could make considerable income by leasing some unused capacity on their network to others and subsidize the cost. They will only need a small percentage of the fiber in 2012. They could arrange for a 5 year agreement on transit from metro A –> metro B. To help cover the costs. This brings you much closer to having high utilization at day 0, and would drastically cut the time to recover the investment cost.

    3. Is Verizon a good comparison? Verizon’s got a whole bunch of different issues than BT’s going to face. First of all, I believe most of VZ’s labor is unionized, and has all the complexities and costs associated with that. Secondly, the US is much more spread out. Verizon is gunning for Comcast’s hot markets. Often those are rich suburbs (spread out), and can be spread apart quite a bit themselves. Britain on the other hand is known like most of Europe for it’s density (UK ranks 51 compared to 180 for us for density). Not to mention Verizon started a few years ago, BT is starting later. Surely VZ’s total cost is higher due to earlier adoption.

  6. OM I think we can both recognise a bit of user bloat when we see it (wink). BT’s endgame is to sew up the high-end homes in the south-east and city, the “can pay, will pay crowd” and use them plus the government to fund fibre across the rest of London. The pop math is straight forward, the SE of England excluding London is 8M. London is a v.conservative 8M (more like 10+) – if BT used its Kent bridgehead and manages to join it to the city of London (cutting through Greenwich, Lewisham and Tower hamlets as well as the new Olympic homes) they open up a market of highspeed internet of about, say close to 15/16M people – more importantly lets not forget that to the people of the southeast, in many cases BT (with either its retail or wholesale hat on) would be their sole provider therefore in a position of strength to focus on its competitors in the other london boroughs.

  7. As you’d expect there’s plenty of puffing up in the BT press release, but the announcement could be a belated but genuine first step towards fibre.

    However, of the £1.5bn promised spend, only two-thirds of it is new money, and to do everything BT promotes in its story headlines would also require an easy ride from the regulator and — perhaps more importantly — lots of public money…

    Similarly, it’s going to be principally an investment in fibre to the cabinet rather than the home. FTTH might happen at brand new sites, like Ebbsfleet in Kent or the Olympic Village, but at this stage it doesn’t look like BT’s planning to replace copper in the local loop unless local authorities partner up and pay for it.

    There’s quite a detailed look at the proposals here, if anyone’s that interested…


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