Extended plans to roll out ultrafast, full fibre services to the UK have been announced recently, but will they be enough to get the UK up to speed and competing effectively on the world stage
In March next year, as everyone in the country is well aware, the UK will leave the EU. This will make competing on the global stage even more important than it has been up to now and make the move to full-fibre, ultrafast broadband even more urgent. This is why the recent announcement that Openreach is reducing wholesale prices on FTTC and FTTP connections to service providers is good news.
These changes will help to drive to extend availably and uptake of superfast and ultrafast broadband services and enable the UK to start making ground on some of the other economies that have made better progress to date. While more than 27.8 million homes and businesses can already access fibre-based services, so far only 9.8 million have upgraded to these services.
Most of these will have subscribed to fibre to the cabinet (FTTC) or ‘superfast’ services. These services tend to offer download speeds of up to or around 40Mbps for most consumers, which will be fine for many users, but won’t provide enough bandwidth to enable truly modern, digitized businesses to deliver optimum performance and productivity.
While a lot of the media coverage surrounding the Openreach announcement in the latter part of July focused on the discounted prices that will be available to comms providers (and they will be significant discounts – the price Openreach charges for its an 80Mbps product, for example, will fall by 40 percent, from £9.95 to £5.99), a separate government announcement set out plans to massively increase the coverage of ultrafast services – providing speeds of up to 1Gbps – over the next 15 years.
These will aim to give 15 million premises given access to ultrafast broadband services by 2025 and full UK coverage by 2033. This all part of the government’s Future Telecoms Infrastructure Review (FTIR) plans and the urgency of driving this forward can’t be underestimated. At present, the UK lags behind many other countries. Only 4% of homes in the UK have a full-fibre broadband connection, compared with 89% in Portugal and 71% in Spain, for example. This is largely because, while Openreach has been investing significantly in rolling out its network, taking fibre to the premises is much more difficult and costly.
It’s notable that the FTIR plans include legislation that will ensure all new build developments do get access to full fibre connections; that’s a very cost-effective way to make ultrafast available – building it in from the start. But most businesses are already located somewhere that is, at present, only served by FTTC at best. They may well get an FTTP option seven years from now (2025) but might also have to wait 15 years (until 2033) under the current plans. That might be too long.
To date, fewer than one million homes and businesses can connect to ultrafast services, and while the plans to extend this are laudable, the question is will they come quickly enough for UK businesses to compete, fully and effectively on the world stage? Or will the superfast (FTTC) connectivity that will undoubtedly become more available and affordable to many more businesses and homes as a result of the changes to Openreach pricing, be enough to keep the UK on a competitive footing with the rest of Europe and the world?
The strong suspicion has to be that it will not and subsequently, pressure will continue to grow on Openreach to make ultrafast services available to more businesses much sooner. The desire and need for higher speed services is evident in the sustained high demand that communications services providers have seen for leased line Ethernet services over the past few years.
Businesses continue to sign-up for these options – even though they are a lot more expensive than broadband – because they provide a guarantee of high speed both downstream and upstream. Reliable and dedicated communications are now a primary requirement of the growing number of businesses that depend on hosted VoIP services for all their business communications, and on public cloud platforms for their core IT apps, storage, backup and disaster recovery, and web services.
This increasing digitization of organisations is going to keep driving demand for ultrafast broadband and other connections higher and higher. It is difficult then to see how Openreach will be able to resist calls for investment to be stepped up even further, so that the roll-out of full-fibre availability can be accelerated again.
Competition may yet force its hand. There are other operators in the market who are looking to build their own fibre infrastructure and thus bring ultrafast options and speeds of up to 1Gbps to businesses in larger UK cities and urban areas. If these companies continue to attract funding and, communications services providers and local resellers will not hesitate to work with them, if it means that they can offer their customers full, no-holds-barred, fibre connections to the premises right away.