Report: UK FTTH Would Cost $50B
The FTTC/VDSL option is the one favored by BT, which announced its Next Generation Access (NGA) plans on July 15.
BT's initial plan, though, doesn't include a national rollout. Instead, the operator hopes to upgrade the broadband access architecture connecting about 10 million homes by early 2013, with the vast majority (90 percent or more) using FTTC/VDSL, while up to 1 million could get an FTTH/GPON connection.
The incumbent operator doesn't have much to say about the BSG's report: The carrier says only that it is "a sensible analysis of a very complex issue, and BT welcomes it as a contribution to the debate around NGA."
And BT is unlikely to say much else until it knows more about the factors affecting its own plans, including the introduction of new regulations from the U.K.'s Ofcom and the willingness of Britain's many local authorities to cooperate in the construction of the new fiber ducts that FTTC and (especially) FTTH deployments would entail.
Those factors, and more, will affect the potential costs associated with BT's plans, and if the economics aren't right for BT, then its NGA strategy will be revised, or even scrapped, according to Steve Robertson, the CEO of Openreach , BT's access network business.
In a recent interview with Light Reading, Robertson said BT's mid-July announcement was a "statement of intent only, not a promise... The business case must stack up. It must be sustainable in the context of the U.K. market," and that can only be achieved if BT can "create a wholesale product that is economically viable."
Robertson said BT Openreach is working hard, and consulting with its wholesale customers, to develop a business model that will make its NGA investments viable and that, ultimately, the plans can only be implemented if it's possible to provide a service to ISPs, including BT Retail, that enables them to develop and deliver services that broadband users will buy. "If they [ISPs] can't create great products, then it won't fly, and it won't be viable," said Robertson.
However, the Openreach man is confident that all the pieces will come together. "We'll only get the investment [from the BT board] if we can show we can create a sustainable business model for BT and the [ISPs]... I am confident we can go on this journey, but we need a degree of humility about the challenges that face us."
The next report that Robertson and his team will digest comes from the U.K. government's Department of Business, which initiated a review of the country's broadband market in February this year. That review has been headed by Franceso Ciao, the former CEO of Cable and Wireless plc (NYSE: CWP), and has become known as the "Ciao report." The results are due to be published before the end of September, though Ciao has already indicated to the Royal Television Society's magazine that he will advise against any public investment in fiber access rollouts.
For more on BT's NGA plans and Steve Robertson's views, check the Light Reading site this Wednesday, September 10.
— Ray Le Maistre, International News Editor, Light Reading
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