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UPDATE KC Expand Fibre Broadband Rollout to 24700 Premises in Hull UK

Tuesday, November 26th, 2013 (2:19 pm) by Mark Jackson (Score 618)

KC (KCOM Group), which serves Hull and some other parts of East Yorkshire in England with broadband and phone services, has revealed that their superfast fibre optic (FTTP and FTTC) based Lightstream Internet service has now passed 24,700 premises and 5,900 customers have subscribed.

The Q3 financial results suggest that the incumbent telecoms provider is still on course to hit its next goal of 30,000 by the end of 2013 and then 45,000 by March 2015 (here). Come the year 2020 they also hope to have met the target set by Europe’s Digital Agenda scheme (i.e. 100% of households with access to speeds of 30Mbps+ and 50% with access to 100Mbps+).

The latest data also reveals that 20.8k of the premises passed with FTTP/C are residential properties and homes similarly account for the bulk of subscribers (4,700). It’s important to stress that most of KC’s deployment is being dominated by their 350Mbps capable true fibre optic (FTTP/H) network, which is the reverse of BT’s approach where the slower up to 80Mbps hybrid fibre FTTC solution is the priority.

Bill Halbert, KCOM Group’s Executive Chairman, said:

The half year position is encouraging and represents further good progress towards achieving our strategic ambitions. We continue to invest in support of the competitive position of our brands, our core IT applications and infrastructure and our broadband fibre deployment. While, as expected, this contributes to a short term decline in certain financial metrics, our strategy and plans continue to yield positive results.

We remain confident about the Group’s longer term prospects and success and expect the full year outturn to be in line with market expectations.”

Apparently 94% of KC’s fibre customers are existing subscribers and 90% take a bundled package (i.e. broadband with phone and or TV services). Sadly KC doesn’t breakdown the statistics for all of their Internet customers, which includes Eclipse Internet subscribers, although they do say that more than 67,000+ customers are now on a bundled service.

UPDATE 27th November 2013

KC’s CEO, Kevin Walsh, has confirmed that he plans to retire next year.

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3 Responses
  1. MikeW

    There’s some interesting information hidden in this release, but unfortunately it remains hidden and uncommented on because KC doesn’t generate the same level of vitriol as BT.

    The good news: KC’s lightstream product is mostly rolled out as FTTP. There’s still FTTC in the mix, and we don’t really know the split.

    The better news: A choice of bundles, allow subscribers to get the speeds they want. Residential can choose from 50/5, 75/5 or 100/10. Business can choose from 60/10 through to 100/30.

    The best news: An excellent take-up rate, and bringing in new customers (those who were too distant to get ADSL?)

    The bad news: Most residential subscribers are choosing the lowest-priced package.

    The middling news: KC are getting an extra £5pm ARPU

    The not-so-good news: it is quite a slow rollout. 45,000 homes in 2015 is going to represent less than 50% of the city/region.

    Add all of those facts together, and you reach a couple of conclusions

    1. That homes, when offered a decent speed without the mucking about that DSL “up to” limitations bring, do take the option (see the 25% takeup), but only choose the slowest, cheapest option. It seems that 50Mbps, even when saddled with only a 5Mbps upstream, is perfectly sufficient, or that no-one can justify spending more of the household budget.

    I can’t help but conclude that almost nobody yet wants the gigabit speeds that fibre can bring, and that nobody wants to pay for it. But I bet they enjoy the stability that they get from dropping DSL.

    2. KC get an additional £5pm to fund this build – which includes funding improvements in the access network as well as additional capacity within the ISP and in back haul to the internet.

    If you reckon on a low figure of £1,000 per home passed, that’s still 15 years to recover costs even when you have 100% takeup. At current takeup, that’s over 50 years.

    And KC have an advantage – they are, essentially, a monopoly within Hull (Others could compete if they chose to, but none have so far). That means they have a reasonable expectation of keeping their customers for a good long period to help repay those costs.

    In 8 years or so, Hull will have a great network that will have capacity well beyond what anyone requires at the time. But they’re running a risk that nobody comes to steal their customer base over the next 20 year payback period.

    • FibreFred

      Good points and what I’ve been saying for a while, hardly anyone needs and even less want (or to pay for) 100M and Gigabit speeds.

      The fibre festishists that shout so loud on sites like these and others don’t represent the rest of the UK regardless of their tired old phrases , they are the very small minority

      Obviously we do need fibre longer term but right now? Is it holding us back? No

      I’m positive if Virgin still did a 20Mb package it would be their most popular and would remain so for at least the next 5yrs probably more.

    • MikeW

      Actually, I think some people are being left behind – those people, probably around 3-8% for whom FTTC isn’t the right solution.

      We need to do better for these people, but to do so we need to identify them and then apply some focus, technology and money on them. We should credit them with a better target than the current USC of 2Mbps (possibly by setting an auto-increasing USC instead), and we shouldn’t keep pushing their deadline back every time a new chunk of budget, and a new deadline, gets added to the project.

      Identifying them can only happen as the BDUK projects play out, and we see how far the budget has pushed coverage. That is certainly a catch22, but it is doing a dis-service to these people to keep coming up with excuses for more delays, even if the delays are well-intentioned.

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