By Natasha Lomas, 8 September 2008 17:20
NEWS
The gigantic cost of building a full end-to-end fibre next generation broadband network across the UK may create a compelling case for getting on with rolling out fibre to the cabinet (FTTC) in the next few years instead.
The cost of deploying a next-gen fibre network in the UK has been estimated at £5.1bn for FTTC (fibre to the cabinet), compared to £28.8bn for full fibre to the home (FTTH), according to a report from the government's advisory group on broadband, the Broadband Stakeholder Group (BSG).
FTTC refers to laying fibre between the exchange and the street cabinet, while FTTH means replacing the copper line from the cabinet to the home as well to create a full end-to-end fibre connection.
Tim Johnson, chief analyst at broadband analyst house Point Topic, told silicon.com: "BT's network will look very old-fashioned indeed if it hasn't got [FTTC] within five years."
But he confessed to being "pessimistic" about the prospects for a full strength fibre rollout in Blighty before 2025 at least.
While the UK's broadband infrastructure is based on a fibre backbone, the so-called 'last mile' connections between homes and telephone exchanges are almost entirely copper-based - creating potential speed bottlenecks, especially as bandwidth-heavy online applications such as video players become increasingly popular. This last mile issue is referred to as 'next generation access' (NGA).
Johnson said a FTTC rollout is vital within five years if the UK wants to stay competitive and support the kind of web services users will want over the next decade or so. "I do think fibre to the cabinet is pretty vital," he said.
"[Without FTTC] it'd be a bit like still trying to use a black and white monitor when you access the Word program. It's going to stop working I really do think unless that's largely done within five years the British network will be in trouble."
Johnson described the BSG report as "another piece of evidence" that FTTC is vital: "It's pretty cost effective. I think the business case for it is going to look stronger by the day more or less. What's £5bn? It's half an Olympic games or something. It's not a great deal of money per household. You don't have to make very dramatic assumptions before somebody's getting a return on it.
"I also think that in practice what it would deliver would be about what people are going to want over the next five to 15 years, five to 10 years maybe."
By contrast the almost £29bn estimate for FTTH is a much more difficult proposition at this point, according at Johnson, who believes a full fibre rollout is "15 to 20 years off" in the UK.
"To try and cost justify that at this stage I think is unrealistic," he said, adding that any FTTC rollout should be done with a view to ensuring a smooth future transition to FTTH, and therefore by factoring in a little extra spending to ensure the infrastructure is futureproofed for an eventual end-to-end fibre rollout.
According to the BSG report, the largest single cost component involved with building a next-gen network will be the civil infrastructure costs associated with deploying and installing the fibre in new or existing ducts. However by re-using existing telecoms ducts, sharing alternative infrastructure owned by utilities companies and even use of overhead fibre in some areas, infrastructure costs could be significantly reduced, the report noted.
The report also predicts there will be much greater cost associated with building out NGA in rural areas, and other areas of lower population density, so commercial rollouts in such regions are likely to be "much more difficult".
Antony Walker, chief executive of the BSG, said in a statement: "If rural areas are to be served in a reasonable time frame, thinking needs to start now about creative solutions for making them more attractive to investment."
A spokeswoman for Ofcom told silicon.com the telecoms regulator is talking to regional development agencies "about making sure the next generation of broadband access is made available and how that can happen realistically".
Asked whether wireless last mile technologies such as WiMax may be required to deliver next generation broadband in rural regions, the spokeswoman said: "There are lots of different mixtures of technologies that could deliver [NGA] especially to rural areas and an element of wireless is one of those."
Ian Fogg, research director at JupiterResearch Europe, believes a patchwork of different next-gen networks is the only realistic option on the table.
He told silicon.com: "In urban areas where the economics are suitable or in greenfield sites, fibre to the home should be deployed. Where the economics are perhaps less favourable there maybe be a business case for FTTC. The challenge with that is it's not just the investment it's also how long that investment will last for. And with FTTC the utility of that network will be fewer years. "And then with very rural areas, in the near term, the likelihood is that they will be ADSL still. So when we talk about these very large sums for doing fibre throughout the country it's quite artificial. The reality is, due to the economics, a mixture of different broadband networks will be used in different parts of the country."
Point Topic's Johnson added that government financial help is likely to be needed if FTTH is ever to be deployed everywhere in the UK. He said: "There has been quite a lot of background government money that has gone into getting DSL everywhere. Particularly outlying parts of Britain and I think that will need to be repeated."
A BT spokesman said: "This [BSG] report is a sensible analysis of a very complex issue and BT welcomes it as a contribution to the debate around NGA." The telco declined to comment further.
BT has previously stated a desire to get more out of its copper infrastructure - via ADSL2+ - before moving to invest in fibre. However, back in July it also signalled it would be willing to spend £1.5bn to give 10 million UK homes fibre access by 2012 - provided it can be assured of a "fair rate of return" on this investment.
Comments
There are 8 comments. Join the discussion
1. anonymous
Much BT bashing here, but I don't see Virgin Media stepping up to the mark here and offering to cable up the UK............
2. Charles Smith
£29 Billion is roughly the amount raised by the 3G auctions in the UK. I wonder who ended up paying that money? Surely not mobile phone users through higher UK call tariffs? Just think what life would be like if that same funding had been re-invested by the government in fibre to the home?
3. Richard Davies
The problem that I see here is that the condition / state of alot of cables from the cabinet to the home is not good at all. With this in mind, fibre right upto the cabinet is going to be no good.
I saw inside a join that fed a whole village where I work and the cable was aluminium and most of it had completely oxidised (I have an example sat on my shelf as you would have to see it to beleive it)!
Also, some of the connectors used are so old fashioned they have alot of resistance which hinders the high speed.
Fibre to the cabinet then is not enough in my mind. The whole infrastructure needs upgrading...either that or I want to be able to plug my DSL modem / router directly into the local cabinet!!!!
4. anonymous
I can't see how it would be posssible to replave the copper to a lot of houses without digging up their roads, driveways and/or gardens. Older estates, where the cables are overhead on poles, might be easy but who wants more digging up of roads, driveways and gardens. Maybe a wireless link fron the local cabinet to every house would work.
5. Simon
To put the figures in perspective, 29bn is a little more than half a Northern Rock.
6. Adrian Carey
As far as I remember Virgin Media were not 'given' an existing nationwide copper network as BT were when they were 'privatised'.
7. ComplyAnt
Assuming you mean US billion (100m), that's £500 for every man, woman & child in the UK (or £820 if you count only working age population www.statistics.gov.uk).
Has anyone considered doubling up changes to services? If we want to encourage microgeneration and renewables, why not use the trenches to use ground source heat pumps at the same time? This would save the householder £300+ pa on fuel bills and repay the costs in under 10 years (assuming cabinet to house would treble the £29bn bill).
For rural sites, the trenches could use way-stations to micro-generate electricity. As ground source works on a reverse-fridge principle, it is feasible to generate steam through repeat-heating.
Or is that too strategic...?
8. Ralph
@ComplyAnt
"Assuming you mean US billion (100m), that's £500 for every man, woman & child in the UK (or £820 if you count only working age population www.statistics.gov.uk)...."
Ahem, you appear to be missing a zero from your US BILLIONS! thou-million for them, million-million for the rest of the world, apart from the need to shout BILLION by BBC news-readers, politicians, fund managers et al so we get the sgort version over here too.
I like your thinking about doubling up on services though. Ideally, we'd end up with a national water pipeline, allessential services down a main supply route, built as a road-side duct, with easy access, that no longer requires digging up roads.
Perhaps Ofcom might chuck BT a few carrots to allow them to offset the cost of putting in fibre to the home, they ain't gonna do it otherwise are they?