Openreach updated on its consultations with industry on future fibre infrastructure development. The access services business is in the process of gauging demand for an ambitious FTTP roll out to ten million sites by 2025, against a backdrop of complaints about lingering copper and calls for greater investment from both industry and politicians.

  • Openreach claims success for its first fibre consultation, but hard work starts now.
  • Estimated cost of FTTP for ten million is £3bn-£6bn.
  • Full-fibre rollout to be tied with legacy copper switch off.

The BT access services business was positive on the results of its first industry consultation process, which it initiated in summer 2017 as part of its commitments to greater industry engagement (BTwatch, #286).

The confidential consultation, which entailed discussions with, and submissions from, major communications providers (CP) including BT Consumer, as well as smaller providers through industry groups, focused on developing a broad understanding of demand and expectations regarding the roll out of an end-to-end fibre network in the UK.

The key findings for Openreach suggest a degree of common ground has been identified across the sector. However, the clear, blunt assertions from the BT business on the fundamental requirements that need to be met to make a rapid shift towards extensive fibre-to-the-premise (FTTP) availability draw out a multitude of economic, political, and regulatory challenges that could drag any progress into a quagmire of debate.

In its summary of the foundations from which a consensus must be built, Openreach stated the following:

  • Full fibre is the future. Unsurprisingly, the Openreach consultation found a consensus among CPs that ultimately full-fibre networks will be needed. There is, however, some disagreement on the timeframe over which the types of speeds delivered by full fibre will become necessary.
  • A supportive regulatory environment is a fundamental requirement. Openreach also reiterated the need for confidence in a stable and supportive regulatory environment where investment will be supported, and opportunity for a fair return on investment is provided. Again, this outcome is unsurprising, and the difficulty emerges when determining what the fair return will look like. More immediately, Openreach reiterated the need for what it considers an investment-friendly conclusion to the ongoing Ofcom wholesale line access pricing review, and a clearer setting out of the proposed exemption of fibre infrastructure sites from business rates (BTwatch, #289).
  • Costs must be spread out over the entire broadband base. Openreach, with apparent industry support, believes the cost of the investment will need to be recovered from a wider base of customers than just the initial fibre base if demand for full fibre is to materialise. Without a degree of subsidy for the cost of FTTP connectivity from users on copper-based offerings, Openreach considers it unlikely that sufficient momentum could build behind the product. The access services business considers that, because a broad base of customers will benefit from the network in the long term, it is reasonable to spread the wholesale cost beyond the early adopters. This is another area where debate appears certain. Although CPs recognise the economic logic of the Openreach view, many are questioning the extent to which end users not using next-generation networks will be willing or able to pay more for their connections without immediate material improvement in the service they are receiving.
  • When full fibre rolls, it has to roll quickly. Openreach has bluntly stated that an economically-viable FTTP rollout will require the last remaining elements of copper to be shut down soon after the new infrastructure is introduced, transitioning to fibre-only infrastructure. Once an area is covered by FTTP, all lines in the area will need to be switched over to avoid Openreach having to operate and maintain over-built networks. The access services business said the industry broadly recognises and supports this approach. However, it will also involve considerable complexity and resource, with careful and detailed planning needed.
  • Other CPs want in on the bet. Openreach stated that some CPs have expressed an interest in co-investment for the fibre rollout, with accompanying benefits in terms of preferential access to the infrastructure once built. A range of models for co-investment has apparently been put forward, but more research and consultation is needed. One CP previously identified as interested in co-investment, Vodafone UK, has already evidently decided that an alternative co-funding model is available with altnet CityFibre (BTwatch, #289, and see separate report).
  • Openreach needs to prove it can bring down deployment costs. The level of investment needed to roll out blanket FTTP coverage is substantial, and the access services division has stressed it is exploring working methods and technology to bring the cost down as quickly as possible. According to Openreach, a focus on more efficient fibre delivery has seen the cost of rollout halve in the past year. Nonethless, despite Openreach cost efficiencies, covering ten million urban and suburban premises with full fibre is expected to cost in the region of £3bn-£6bn. BT and Openreach have referred to a new method of trench digging as a simple but effective way of bringing costs down. This requires a substantially narrower ditch to be dug, and enables more to be done in a single day — an innovation that resembles a breakthrough unveiled by Virgin Media when it announced its Project Lightning rollout in spring 2016 (BTwatch, #276).

Image: Christopher Burns/Unsplash.

Table of Contents

EXECUTIVE BRIEF

GROUP

Deals

Zambia appears on Group radar again [p6]

Ambitions must tiptoe around an emboldened Vodacom
Partner Markets’ Cameroon affiliate goes offline
Table 1 People movement highlights

IT

Vodafone Turkey reaches line on major BSS overhaul [p12]

A happier ending than other convergence-led IT refits
Back from the brink
Table 2 Vodafone Turkey long-term trends overview, FY09-17
Fighting fit
Breaking trail
Spotting the curveballs
Table 3 Vodafone Turkey BSS transformation project overview
The personal touch

Group Commercial

Red Edge expanding behind scenes, targets APAC [p18]

A first step outside Europe

Legal and regulatory

Colao’s “itchy feelings” about Brussels prove prescient [p19]

EU-surped
You don’t like consolidation, do you Brussels?
Suggested code revisions not all bad for Vodafone?

Supply chain

Vodafone ties with American quartet on AI [p22]

Care and networks provide the focus for AI
Vodafone’s new business model – network reduction
Group still looking in-house for data dollars

VMware lifts lid on Group NFV win… [p24]

Table 4 Partner/supplier people movement highlights
… and ties with IBM to give Cloud & Hosting Services a leg up

Profile

Allot [p26]

Breaking out of the capex vault
Biography: Erez Antebi
Customer focus
Virtual reality
New IoT and video use-cases
Operators remain central
Vodafone Secure Net: next steps
Table 5 Vodafone Secure Net availability, October 2017

EUROPE REGION

Ireland

SIRO pulls out of National Broadband Plan tender [p33]

Netherlands
Ericsson extends Dutch networks tie-up [p34]

Accompanying kit deal includes LTE for Machines
A challenge-filled deal backdrop

Portugal

Vodafone boosts broadband cred with NOS tie-up [p36]

Partial win
Table 6 Portugal converged operator user comparison, 30 June 2017
We’re close, but not that close
Mix and match
Table 7 Vodafone European wireline rollout and regulatory agenda
Raised hackles over Altice media-expansion plan

Spain

VfS brings DOCSIS 3.1 upgrade live [p41]

Other markets in pipeline
Table 8 Gigabit Vodafone checklist

AFRICA, MIDDLE EAST, AND ASIA-PACIFIC REGION

Australia — Vodafone Hutchison Australia

VHA preps Vodafone TV release [p44]

Table 9 Vodafone TV customer base comparison by market (‘000)
New Zealand also a Vodafone TV target
NBN plus
Hutch reaffirms Total Comms ambition
Table 10 Selected Vodafone OpCo “4.5G” tests and rollouts (500Mbps and above)

VHA jumps on Massive MIMO bandwagon [p47

VHA knows the recipe but can it afford the ingredients?

Egypt

VfEg ties with Openwave on video management [p50]

New Zealand

VfNZ takes 400Gbps metro route with Ciena [p51]

Ciena feet under Group table

Vodacom Group

Safaricom pushes back against Vodacom control [p52]

Safaricom and Vodacom not yet BFFs
Table 11 Prospective Safaricom ownership, post-2017 Vodacom transaction
M-PESA unshackled: A less-Vodafone-based future emerges, and this may not be a bad thing
Power play as M-PESA goes OTT
The geo-political angle

VdSA moves focus to LAA amid 4G spectrum squeeze [p55]

Lukewarm on LAA
On the spectrum back-foot

FURTHER READING

INDEX

Table of Contents

EXECUTIVE BRIEF

GROUP

  • Q2 FY17-18: Further points of note

MANAGEMENT UPDATE

Q2 FY17-18: gloomy numbers, but turnaround promised [p6]

  • Q2 FY17-18: Further points of note
  • Group Chief looking at the stars
  • Investors want to be shown the money
  • Table: BT Group, financial highlights, Q2 FY17-18
  • Burger the man with the plan at Global Services
  • Q2 FY17-18: Further points of note

Q2 FY17-18: divisions evolving at different rates [p10]

  • Associates on new BT chairman
  • Table: BT Group, performance by unit, Q2 FY17-18 (adjusted) *

As BT puts house in order, new Chair has troubles of his own [p12]

  • Tighter grip on the reins needed
  • BT tying up top legal minds

Government grumbles on Openreach split progress [p13]

Digital Britain

Hancock keeps up bad cop act with BT… [p14]

  • 5G moving up the government agenda

…Hancock’s boss might be the good cop [p15]

  • DCMS intervenes in WLA
  • Not entirely pro-BT, but Bradley nuanced on fibre future

Regulatory

BT’s USC offer meets resistance [p16]

  • Cost recovery through Ofcom could be a sticking point

Suppliers

BT signs new contract with Ciena [p18]

  • Latest contract builds on previous deals and trials
  • Table: People movement highlights

CONSUMER/EE

5G

EE highlights 5G testing as Huawei relationship blossoms [p23]

  • Huawei trials a step forward, although healthy scepticism over 5G hype remains
  • Facebook backs away from Premier League swoop

Pricing and tariffs

BT agrees line rental price slash [p24]

  • One million BT accounts could see a change
  • BT and Ofcom also to push for dual-play promotion

Devices

Google lets EE down with Pixel 2 XL glitches [p27]

  • Table: EE on the LTE-A catwalk: networks and devices
  • Reputation shot?
  • Pixelated future
  • Cat-16 let loose in Netgear
  • YouView moving forward with wider platform, targeted ads, more analytics

BUSINESS AND PUBLIC SECTOR

Partners

BT adds AudioCodes SBCs to support SIP trunking [p31]

  • Virtually there?

GLOBAL SERVICES

Cloud services

BT strengthens cloud links with AWS [p33]

  • Key elements of the BT/AWS collaboration
  • More to come, promises Burger, as cloud strategy accelerates

Dynamic Network Services

Cisco and BT flag latest DNS development [p36]

  • BT wins wholesale contract extension with Sky in Ireland
  • Cisco burrows deeply into BT networks
  • BT strives to be a one-stop shop

BT International: Europe

BT leases dark fibre in Holland [p38]

Security

BT sets up SOC in Germany [p39

  • Why the wait?
  • Security enhancements…
  • …security leader

WHOLESALE & VENTURES

Partners

BT, Avaya bring personalised cloud to mid-market firms [p42]

  • Add-ons

OPENREACH

Fibre consultation

Openreach demands full-blooded fibre conviction [p46]

Openreach consults on ‘grey’ fibre [p48]

Networks

Openreach co-produces West End gigabit show [p49]

  • Howdy, partner

FURTHER READING

INDEX

Index

A

Accenture 20
Acuitas Digital Alliance 21
ADVA Optical Networking 48
Alcatel-Lucent 19
Alphabet
Google
Google Pixel 27, 28
Amazon 8, 33, 34
Amazon Web Services 8, 33
Apple 10, 28
iPhone 28
Arbor Networks 40
AT&T 31
AudioCodes 31
Avaya, Inc. 42, 43

B

BAE 20
BAE Systems 20
Detica 20
BG Group 20
British American Tobacco 12
Broadband Forum 23
Broadband Stakeholder Group 14
BroadSoft 31
BT Group 6, 7, 10, 11, 12, 13, 14, 15, 16, 18, 19, 20, 21, 23, 24, 29
BT Business & Public Sector 11, 21, 31
BT Cloud Voice 31
– – BT Ireland 37
BT Consumer 6, 7, 10, 11, 20, 24, 25, 29, 46
BT Basic 25
– – BT Cloud 31, 34
– – BT Infinity 12, 29
– – Plusnet 21
BT Global Services 6, 7, 8, 11, 20, 21, 32, 33, 34, 36, 37, 39
BT Assure 40
– – BT Conferencing 21
– – BT Connect 36
– – BT Germany 33
– – BT International 33, 38
– – BT Italia 12, 20
– – BT Nordics 38
– – BT Security 8, 20, 39, 40
– – Spain 34
– – Virtual Private Network 19
BT Pension Scheme
Crown Guarantee 13
BT Retail 20
– BT Technology, Service and Operations 19
21CN 19
– – Adastral Park 23, 29
– – Azure 34
– – Infinity Lab 12
BT Wholesale & Ventures 11, 31, 42, 43
IP Exchange 6
Directors
du Plessis, Jan 6, 11, 12
EE 6, 7, 10, 11, 20, 21, 22, 23, 25, 27, 28, 29
Emergency Services Network 10
Executives
Allera, Marc 7, 10
– – Alvarez, Luis 34
– – Blight, Meg 20
– – Burger, Bas 7, 8, 20, 34
– – Cameron, Richard 20
– – Doyle, Sian 21
– – Ducke, Thomas 20
– – Fearn, Ulrica 20
– – Frangos, Jean-Marc 20
– – Hanif, Mansoor 27
– – Hicks, Lydia 20
– – Hischer, Stefan 33
– – Jungling, Torsten 39
– – Lowth, Simon 6, 10, 20
– – McRae, Neil 18, 23
– – Mears, Kim 49
– – Orme, Simon 42
– – Palchik, Arina 20
– – Patterson, Gavin 6, 10, 23
– – Selley, Clive 7
– – Shah, Rajiv 20
– – Sherry, Keith 21
– – Smith, Martin 20
– – Sutton, Neil 34
– – Vaughan, Abigail 20
– – Wallington, Darren 48
– – Watson, Howard 13
Openreach 6, 7, 11, 13, 14, 15, 19, 45, 46, 47, 48, 49, 50

C

Canonical 27
CBRE 21
CBRE Group 21
Ciena 18, 19, 48
Cisco Systems, Inc. 8, 19, 34, 36, 37, 39, 40
CityFibre 47
Comcast 21
Communications Workers Union 10

D

Darktrace 39
Dell EMC 19
Department for Culture, Media and Sport (DCMS, UK)
Bradley, Karen 15
Deutsche Telekom 13, 34, 40
T-Systems 34
Diageo 20
Digital Britain 14

E

Eir 37
Equinix 34
Ericsson 25
European Union 10, 11

F

Facebook 13, 24, 27
Football Association
Premier League 12, 24

G

Google 27, 28

H

Hewlett Packard Enterprise 34, 39
High Court 16
Home Builders Federation 50
House of Commons
Public Accounts Committee 10
HP Inc 34, 39
Huawei Technologies 12, 19, 23

I

Intel 13, 39
Intel Security 39, 40
International Electrotechnical Commission (IEC)
Broadband World Forum 14
International Paralympic Committee (IPC)
Paralympic Games 21
Interxion 34

J

Juniper Networks 19, 40

K

KPMG 40

L

LG 28
Liberty Global 29
Virgin Media 11, 14, 20, 29, 47
Lime Microsystems 27
LinkedIn 21

M

Microsoft 34

N

Nokia 13, 27, 37
Nuage Networks 19, 37
Nomura 28
Npower 29

O

Ofcom 14, 15, 16, 23, 24, 25, 46, 50
Light User Scheme
BT Basic 25
USO 16
Olympic Games
London 2012 21
Oracle 34
Orange 21, 40

R

Relined 38
Rio Tinto 12
Rogers Communications 21

S

Salesforce 34
Samsung 27, 28
SAP AG 34
SATO Global Solutions 21
Siemens 19
Sony 28
Symantec 40

T

TalkTalk Telecom Group 16
TechHub 12
Technology
2G 28
– Broadband 13, 14, 16, 23, 24, 25, 29, 37, 46, 48, 49, 50
– Ethernet 19, 43
– Fibre 6, 11, 14, 15, 18, 29, 37, 38, 46, 47, 48, 49, 50
Fibre-to-the-cabinet (FTTC) 11, 14, 15, 49
Fibre-to-the-premises (FTTP) 46, 47, 49, 50
– G.fast 14, 15
– ICT 21
– IN 19
– Internet of Things 21
– IP 6, 13, 19, 27, 31, 43
– LLU 48
– LTE 23, 28
– mmWave 25
– MPLS 8
– R&D 40
– SIP 27, 31
– TDM 31
– Unified Communications 31, 43
– VDSL 16
– VoIP 31
– VPN 19
– Wi-Fi 25, 28
Telecom Infra Project 13, 27
Telefónica 13
Teligent 19
ThreatConnect 39

U

University of Cambridge 12

V

Vodafone 13, 37, 47, 50
SIRO 37
– UK 47
VoltServer 25

Y

YouView 29

Z

Zscaler 40

About

About BTwatch

Report: #290
Published: November 2017
Next report: December 2017/January 2018
For more information visit: BTwatch