The UK needs to invest in a national fibre-optic network extending into the last mile links to businesses and homes, otherwise UK firms risk losing ground to overseas rivals with better broadband infrastructure, according to experts.

The UK's focus on expanding Digital Subscriber Line (DSL) coverage misses the point, argued Martin Thunman, chief executive of broadband infrastructure specialist PacketFront. He believes that firms will soon require Gigabit Ethernet wide area network (WAN) links to stay competitive.

"It's fine to address the immediate need (for broadband WAN links) with DSL and leased lines, but in the long term this country needs to have a full national fibre infrastructure," Thunman said. "That construction needs to start now or there will be big problems in 10 to 15 years' time - you can't just wait until the roof of the current infrastructure capacity is struck."

Carriers such as BT, NTL and Telewest have shied away from expanding their fibre-optic backbone networks into the last mile, citing high costs.

But Thunman said the cost of adding a fibre-optic drop from a carrier point of presence (POP) to a customer site could be under £500.

"To lay passive fibre infrastructure offering 1Gbit/s Ethernet connections in the last 300 metres averages out at around £250 per connection, and £375 for 800 metres," Thunman suggested.

Tim Johnson, senior analyst at research firm Ovum, agreed that passive optical networking (PON) is relatively cheap, but pointed out that these figures took no account of termination equipment at either end of the link, or the cost and complexity of digging new trenches for the cables.

Johnson also doubted whether there would be much demand for 1Gbit/s fibre-optics in the last mile for some time. "The strategy is to roll out fibre to the kerb and take data over copper for the rest of the link, getting up to 10Mbit/s both ways depending on how far away from the POP or local telephone exchange the end user is. That will be enough for the next five to 10 years," he said.

But demand for bandwidth is almost certain to keep rising, forcing carriers to re-evaluate their strategies for providing ever bigger data pipes to business customers.

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