The IT giant doesn't intend to be a retail service provider itself, though: The aim is to build an 'open access' network that could be used by numerous service providers that would pay to run their services and applications over the physical network. The open access model has been adopted in Singapore and Australia. (See Australia Unveils $31B FTTP Plan and BBWF 2010: Running Singapore's NBN.)
The plan, if put into action, would pit Fujitsu's U.K. operation directly against Openreach , the access network division of BT Group plc (NYSE: BT; London: BTA).
Ironically, Openreach offers wholesale broadband access capacity to U.K. service providers using MSAN (multiservice access node) equipment sourced from Fujitsu.
Fujitsu's plan involves building out a network that would provide point-to-point fiber connections to 5 million premises (residential and business) in "remote" areas -- in small towns and villages that are harder to reach with traditional fixed broadband.
The IT firm believes it would cost between £1.5 billion and £2 billion (US$2.45 billion and $3.27 billion) to reach those premises. To achieve its aims, Fujitsu says it would seek up to £500 million ($817.5 million) in support from the U.K. government's broadband fund toward that total. (See British Broadband Cash Survives Cuts.)
But despite enthusiastic noises from the U.K. government, nothing's underway yet. Fujitsu says its business plan doesn't stack up if BT doesn't reduce the wholesale prices for access to its ducts and telegraph poles, which Fujitsu would need to access to roll out the fiber. BT made proposals on such wholesale costs earlier this year, but Fujitsu is looking for lower prices. (See BT Tables Duct & Pole Proposals.)
In the meantime, Fujitsu has the support of U.K. cable operator Virgin Media Inc. (Nasdaq: VMED) and broadband service provider TalkTalk , both of which are eager to be anchor tenant wholesale customers for the network.
Fujitsu has also named Cisco Systems Inc. (Nasdaq: CSCO) as a technology collaborator on the project, but a Fujitsu spokesman told Light Reading that it was undecided exactly what sort of role Cisco might play or what technology Cisco, a leader in point-to-point fiber access platforms, might supply for the planned network. (See Cisco Wins Swedish FTTH Gig.)
Why this matters
An alternative next-generation broadband access plan for the U.K.'s remote areas is a positive development, especially as Fujitsu is taking a long-term, practical approach to its return on investment. And it's proper super-fast broadband too, based on a dedicated fiber connection that could enable up to 1 Gbit/s in the uplink as well as downlink, and even faster speeds in the future -– a far more compelling proposition than the copper plant-based, fiber-to-the-cabinet (FTTC) broadband offer that comprises much, though not all, of BT's current efforts. (See BT Preps 'Landmark' FTTC Investment, BT Ramps FTTx Plans, Turns a Profit and BT's Fiber to the Hype.)
But Fujitsu's plan will only benefit the country if it gets off the ground, and there are a number of hurdles in Fujitsu's way.
The plan relies on BT's reducing the price of access to its passive infrastructure, a process that could take years.
And building such a network is not something that can be done overnight, so any potential benefits from such a plan won't be realized for a while yet, by which time the regulatory and political landscape of the U.K. may have changed.
In addition, Fujitsu's business plan has some challenges. The government's broadband fund is set at £530 million ($866.5 million) for the duration of this parliament (up to 2014 or 2015) and £300 million ($490.5 million) during the next (up to circa 2019), so Fujitsu is looking for its plans to sweep up a large percentage of the overall funds available.
And even at the higher end of its costing, £2 billion for 5 million premises is an average of £400 ($654) per connection, which seems ambitious for remote areas.
The initiative is to be welcomed, especially as it targets the areas that often aren't reached by top-end fixed broadband connections, but Fujitsu will do well to get its plan off the ground and completed.
Britain is becoming famous for talking about next-generation broadband while many other European countries deploy it:
- FTTH Council Updates Euro Ranking
- BT Relaxed on FTTX Unbundling
- Broadband Britain: The Wait Goes On
- Virgin Trials FTTH
- BT Preps FTTC Trial