Hyperoptic Takes Gigabit to Glasgow

Gigabit broadband service provider has started operations in the Scottish city of Glasgow as it expands its fiber rollout and adopts a 'property company' mindset.

September 21, 2015

5 Min Read
Hyperoptic Takes Gigabit to Glasgow

Dana Tobak is on a mission to bring gigabit broadband to Britain, and is targeting multi-dwelling buildings as a prime opportunity that can make that mission a profitable one.

Tobak is the managing director of UK specialist ISP Hyperoptic , which began developing its "fibrehood" in London in 2011. Now, following several years spent establishing itself in new housing developments across the UK capital, and following a £50 million (US$77.6 million) cash injection in 2013 from an investment vehicle run by famous financier George Soros, it is focusing just as much on the rest of the UK and has just announced a deployment in the major Scottish city of Glasgow. (See Hyperoptic Lands £50M Investment and Hyperoptic Plans 1-Gig FTTH in London.)

The Glasgow launch follows hard on the heels of a service launch in the English city of Nottingham. (See Nottingham Gets Gigabit From Hyperoptic.)

Tobak, a veteran of the UK broadband sector (she was also managing director at Be, the ISP acquired by Telefónica in 2006), says 12 UK cities have been announced, with more to come before the end of the year, and commercial services are available in nine of those markets. "We are now seeing that our national sales team is as successful as the London team," says Tobak, striking deals with new building developments and, increasingly, with existing buildings looking to make very high-speed broadband services available to tenants.

Hyperoptic has a focused business plan based on point-to-point active Ethernet connectivity that involves either being integrated into a new build or meeting demand in buildings housing 50 or more potential customers. The operator installs optical equipment in the basement and runs fiber or Ethernet cable to the customers, who are provided with a CPE device (currently routers designed and supplied by ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763)). Tobak declined to discuss Hyperoptic's optical infrastructure supplier, but it is believed to be Huawei Technologies Co. Ltd.

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The operator uses wholesale connectivity for backhaul from its connected buildings (fiber from BT to local exchanges and then long-distance wholesale connections to Internet exchanges) and currently has no plans to start digging up roads itself.

It has installed technology in more than 1,000 buildings and "passed" more than 100,000 customers (the number it could hook up immediately with installed equipment), but Tobak isn't ready to share details about how many commercial customers are using and paying for the services, which include 100Mbit/s and even 20Mbit/s options.

A gigabit service is available to residential users for £22 (US$34.14) per month (for the first six months -- £47 (US$72.96) per month after that) with no extra installation or activation costs, though this comes as part of a broadband plus voice line package, with the phone line connection costing an additional £16 ($24.83) per month. A broadband-only option is available at an introductory price of £35 ($54.32) per month for the first six months and £60 ($93.12) thereafter.

And now there's a big push to reach SMEs, says Tobak, who claims Hyperoptic can deliver SMEs with "leased line connectivity at broadband prices." A gigabit broadband service for a business user is currently available from Hyperoptic for £300 per month ($465.62).

Tobak and her team have plenty to do, but the time to do it. She says the Soros funding will take the company to a cashflow positive position, and is confident of achieving that with the current plan. "Our rate of expansion is sustainable and we are maintain a very positive customer experience, with 98% of customers saying they are satisfied or very satisfied," she says.

And as the Hyperoptic team has grown, it has been taking on key skills. With the opportunity to capture the broadband opportunity at new building developments so vital to the company's growth and success, "we recognized that we needed to be a property company, not a telecom company," says the MD. "So we hired people from the property sector who can talk the language of that sector and who can understand the challenges of the property owners," adds Tobak.

That's a move that makes a lot of sense for Hyperoptic's business plan and could work to the company's advantage if talk of new home construction in the UK becomes a reality and, as expected, it includes multi-dwelling buildings.

Competition to offer high-speed broadband services to homes and businesses in the UK is intense, of course, and Hyperoptic isn't the only company promoting gigabit services. CityFibre is building new city fiber networks across the UK and is selling capacity to retail service providers keen to take a lead in next-generation broadband, with the city of York about to go live. (See TalkTalk Unveils Cut-Price Gigabit Service.)

Meanwhile, pressure is being put on BT -- which is aiming to use its existing copper network to meet its customers' broadband needs -- by rivals and industry groups over the incumbent's strategy. (See Eurobites: Rivals Sharpen Knives Over BT Broadband and Eurobites: BT Boasts 330 Mbit/s With G.fast Field Trial.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

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