Broadband in 2013: Four-letter words beginning with 'F'

By Sooraj Shah
26 Dec 2012 View Comments
BT red phone kiosk

By the end of 2013, BT hopes to come towards the end of its commercial rollout of fibre-to-the-cabinet (FTTC) broadband, which aims to cover two-thirds of the UK's premises.

"It's been a successful rollout, and has been pulled forward twice from finishing in December 2015, then December 2014 and now it is scheduled to be completed in spring 2014 - It won't be put forward again because it is very soon now," Mike Galvin, managing director of BT's infrastructure arm Openreach told Computing.

Further reading

The key date to look out for in 2013 is in May, when Ofcom is expected to announce its proposals for regulation in the wholesale broadband access market.

The proposals came to light when alternative networks that rent from Openreach revealed that they weren't sure how much they were paying Openreach for the wholesale input of the fibre service.

"I suspect the alternative networks did this to get attention and it worked," claimed Ovum analyst Matthew Howett.

"At the moment Openreach is free to price the wholesale product as it sees fit, there is no regulated pricing and access seekers such as TalkTalk would like to see a regulated product because they believe the price would come down," he added.

But if the product was regulated, it is no certainty that the price will go down, it could even rise as currently Openreach has considered a much longer return on investment that it would normally be prepared to take in a regulated environment.

"Ofcom has a difficult decision to make: whether it lets BT free to set the price for its fibre product on a wholesale basis or if it decides to intervene. I suspect that it wants to keep BT onside and continue the rollout as planned," Howett said.

Openreach's Galvin said that as well as the commercial rollout there will be some "new" technology entering the fray.

This, he said, includes BT's fibre-to-the-premise (FTTP) product, more widely known as fibre-to-the-home (FTTH). Many within the industry have claimed that the UK needs FTTH to be able to compete with the likes of South Korea and Japan's connectivity for businesses, but a nationwide rollout would prove costly, and as former culture secretary Jeremy Hunt has claimed, it could cost the government £28bn if it were state-funded. BT has always insisted that demand for FTTH is patchy at best: 2013 will give a good indication of how much demand for the product there really is.

BT recently announced that it would slash its wholesale price of its fastest FTTP product (330Mbit/s downstream) from £60 a month to £38 in June 2013. FTTP will only be available in FTTC areas and will also mean an installation fee of £500; the services will be available for consumers in spring 2013.

Another "new" technology that BT is trialling is vectoring. Galvin explained that the technology is similar to noise cancellation technology used in the headphones passengers receive on planes - but applied to copper wires.

"What it does is effectively greatly limits what is called cross-talk in the wires in the FTTC therefore enabling much higher speeds to be obtained for all the customers on that particular cable," he said.

A number of factors, such as the condition of the cable, the length of the cable, how many customers are using the cable all come into play but typically, Galvin said, people could see an increase in speed of at least 20 per cent over current FTTC speeds.

Galvin also said that due to the European Commission finally granting permission for £530m of state-aid to be invested in bringing superfast speeds to 90 per cent of homes, most rural areas can now look forward to much faster internet speeds. He said BT, which is the only selected provider for many rural areas to date, is "determined to show that it is the right choice to rollout rural broadband".

But the government has a lot to do to convince critics, such as the Country Land & Business Association (CLA), which claimed that between 15 and 20 per cent of those who live in rural areas are still unable to receive anywhere near the government's benchmark of a minimum 2Mbit/s speed.

Meanwhile, Andrew Saunders, head of product management at internet provider Zen, has claimed that 2013 will also mean the end for certain technologies.

"What is also going to happen in the new year is the demise of some of the older broadband services. SDSL, for example, which gives a 2Mbit/s symmetrical service, will be withdrawn and is costly compared to faster fibre broadband, and this will force change. Growth of fibre broadband will also be supported by new business-grade services, such as Ethernet, which can be delivered over fibre broadband connections," he said.

A new player in the broadband area is EE, which said it wants to go reach 50 per cent of the population with its services in the first part of 2013. EE is renting broadband wholesale from Openreach, while BT has indicated that it could be interested in bidding for spectrum at the 4G auction.

With two of the biggest telecoms companies potentially interested in both mobile and broadband, it could be something to keep an eye out for in 2013.

"The instances of bundling are becoming a lot more common. For a consumer it is a lot more convenient to deal with just one party and quite often there are very good packages available if you take everything from one supplier, so there clearly are a role for those players in the market. If BT wanted to launch a similar package to EE (without acquiring spectrum), it could rent wholesale mobile from somebody else," Howett said.

Howett said it was understandable that BT's focus is on fixed-line broadband.

"There is a lot of money they have to spend to get the whole of the UK fibred up, and if they bid for 4G spectrum then that would take away from that pot of money," he said.

Galvin added that from a retail point of view the internet is going to go through a major transition.

"The likes of Sky, BT Retail and TalkTalk are going to have some fantastic TV offerings; you are also going to see in the business area some fantastic cloud services by service providers. The internet will move out of the study into the living room to become a mainstream entertainment tool. I think some of the services like YouView will be groundbreaking, and we are the major enabler of these services," he said.

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