BT’s next generation access (NGA) broadband network will fail to reach many prospective customers, say experts, who have compiled research into where end user demand is most likely to be.

A report published today [12/11/09] by broadband analyst company Point Topic has overlaid its own map of NGA broadband demand over BT’s stated plan for coverage. It finds that BT's rollout falls considerably short in many urban areas, meaning thousands of business and residential customers may be left with no access to superfast broadband links.

“The program they have announced is quite a way short of even what will be driven by market demand, so we are likely to see a big have and have-not divide,” said Point Topic chief analyst Tim Johnson.

BT has long argued that it is uncertain about the scale of demand for fast, fibre optic broadband links offering up to 40Mbit/s of downstream bandwidth amongst UK homes and businesses, and Point Topic’s research seems to suggest the telco has substantially underestimated end user interest.

Many businesses and local councils are concerned about the prospects for NGA in their region, with bandwidth up to 40Mbit/s expected to boost the local commerce by helping businesses thrive in the digital economy.

Alternative high speed broadband provision from rival providers will be available in a few selected areas, including South Yorkshire. Digital Region, a partnership between Yorkshire Forward (the regional development agency for Yorkshire and Humber), Sheffield Council, Barnsley Council, Rotherham Council and Doncaster Council that has attracted over £90m of funding from European Union, for example.

Since its inception in April this year [2009] Digital Region has contracted Thales UK to build a network offering a minimum guaranteed 25Mbit/s broadband service to business and residential customers, with 97 per cent of the region’s population expected to get the service by July 2012.

“Let us be clear that even without Digital Region, South Yorkshire will get its next generation, very high speed, 21st century network – because the future is digital.
But, without our intervention, it might just have to wait until the 22nd century to get it. There is no reason to suppose that, left to its own devices, the telecoms market will favour South Yorkshire," said Phil Coppard OBE, chief executive of Barnsley Metropolitan Borough Council at the Digital Region partnership’s launch.

"Without Digital Region, South Yorkshire, or at least large parts of South Yorkshire, as in so many other national investment decisions, will be at the back of the queue,” he added.

"Digital Region has had to spend years going through all sorts of hoops to convince the authorities that this is a reliable thing to do," said Johnson. " It makes South Yorkshire look pretty good but it is not an easy option."

Gartner research vice president Scott Morrison points out that DSL based Ethernet in the first mile is also a viable alternative to high speed fibre for many businesses in the UK depending on how close they are to the local telephone exchange.

"BT is not the only provider of these Ethernet solutions in the UK, and as such, this represents a competitive alternative to fibre, both for internet and for MPLS connectivity," he said.

BT has said the NGA network will cover 40 per cent of homes and businesses by 2012, though Point Topic says that only 35 per cent is possible according what the telco has revealed of its plans so far. The cost of the NGA rollout may well prove a barrier to its breadth, with recruitment and other issues similarly affecting BT's ability to deploy the network in a short space of time.

“There are issues over BT finances, and NGA rollout faces cost and capacity problems as well,” said Johnson. “In a way it is much more expensive to try to implement NGA faster rather than steadily roll it out over a period of many years."

"They [Point Topic] are saying that there is potential demand for NGA outside the areas that have already been announced," countered a BT spokesperson. " Since we [BT] have only announced the exchange areas covering the 1.5m premises we'll be taking NGA to next summer, that is not surprising. We will be bringing NGA to 40 per cent of the UK by 2012 but Point Topic does not have information about which exchange areas we'll be deploying it to because we have not [yet] announced the vast majority of them."

BT's latest financial results saw 'another quarter of progress' according to chief executive Ian Livingston.

The troubled Global Services Division, which paid an 'impairment' charge of £280m in the previous quarter, saw revenue dip slightly by 3 per cent.

"These figures are more or less in line with the situation seen in the first quarter, and with BT's own expectations," said Gartner's Morrisson.

"Improvements in profitability have come from cost reduction, which is necessary, but of course, creates short-term concerns about how well BT can serve its customers while it is in the midst of its transition."