Report: UK FTTH Would Cost $50B

Hooking up every home in the U.K. with a dedicated fiber connection would cost £28.8 billion (US$50.8 billion), according to a new report published by the Broadband Stakeholder Group (BSG) , the British government's advisory group on broadband issues.

The BSG's report, published today, examines the cost of taking fiber to each of the U.K.'s 27.2 million homes and businesses and examines the variations in costs that would arise from the use of different technologies.

The report comes only two months after the U.K.'s national operator, BT Group plc (NYSE: BT; London: BTA), unveiled plans to invest £1.5 billion ($2.65 billion) in so-called "super-fast broadband" technologies. (See BT Unveils $3B FTTx Plan and BT's FTTH Conceit.)

Digging deep for FTTH costs
The BSG report's numbers will provide an interesting reference for BT, its wholesale broadband customers, and the U.K.'s alternative broadband infrastructure players, all of which are keen to understand the economics of fiber access deployments.

“This is the most comprehensive analysis produced to date on the costs of deploying fibre in the UK,” stated BSG CEO Antony Walker in a prepared statement. “The scale of the costs looks daunting but the report does shed light on how some of these costs can be reduced and what the likely extent of commercial rollout will be. It should focus minds of commercial players, policy makers and regulators on the potential solutions to these challenges.”

Using data provided by analyst house Analysys Mason , which undertook an intensive study of various fiber access technologies, the BSG found that the most expensive option, costing £28.8 billion, would be to run point-to-point fiber from local exchanges to each home and business.

Hooking up each potential end user with an FTTH connection using GPON technology, with each fiber running from the local exchange being shared by an average of 32 customers, would cost £24.5 billion ($43.2 billion).

Deploying a fiber-to-the-curb (FTTC) infrastructure, and using VDSL technology to provide a broadband service over a copper line to each customer's premises, would be much cheaper, costing a total £5.1 billion ($9 billion), according to the BSG report, which can be found here.

That would put the cost of an FTTC/VDSL national rollout at 18 percent of a full point-to-point fiber network, and 21 percent of the cost of an FTTH/GPON network.

But even the cheapest fiber option would involve a much greater capital commitment to British broadband than has been made to date, notes the report. While the U.K. has nearly 100 percent broadband coverage from its numerous DSL and cable broadband service providers, a national FTTC/VDSL rollout "would cost three or four times more than the telecoms sector has spent in deploying the current generation of broadband services."

The BSG notes that the "largest single cost component is the civil infrastructure (the cost of deploying and installing the fibre in new or existing ducts)." Those costs could be reduced by reusing existing ducts, sharing infrastructure owned by other companies, such as utility companies, and "the use of overhead fibre distribution in some areas."

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