By: MarkJ - 13 December, 2011 (6:45 AM)
uk channel island jerseyJersey Telecom's (JT) five year Gigabit Isles strategy, which was announced in 2010 (here) and seeks to deploy superfast broadband ISP services across the Channel Islands of Guernsey and Jersey, appears to have secured the additional funding required to proceed with its work on Jersey. The move comes despite growing competition concerns from several rivals.

The overall aim is to invest around £40m on a gradual replacement of JT's existing copper cable (ADSL services etc.) with a true fibre optic FTTH network (Gigabit Jersey Point-to-Point). As a result some homes and businesses are likely to receive internet access speeds of up to 1Gbps (1024Mbps)!

A report on Thinkbroadband confirms that further progress has finally been made after the State of Jersey (SoJ) (JT's sole shareholder) agreed a way to help fund the project through a reduction in dividends. In short SoJ has agreed to offer a £3 Million reduction for each of 2013-2015 financial years to assist in JT's upgrade work. This decision will also see the transfer of £10 million from the Currency Fund during 2012. It's interesting to note SoJ's view of JT's technology choice.

SoJ's Project Evaluation (Gigabit Jersey Point-to-Point)

The Minister for Treasury and Resources commissioned Oxera, the States of Jersey’s external economic consultants, to evaluate JT’s proposal to replace the existing copper network with a complete island wide point-to-point (PtP) Fibre-optic network.

The report made comparison between the PtP and the Very high bitrate Digital Subscriber Line (VDSL) alternative options. Oxera recommended that in the interests of the shareholder, JT should adopt the PtP strategy rather than VDSL as it was a sound investment, thus protecting shareholder value. Officers of Treasury and Resources Department have also reviewed the business case in detail.

Regular readers will know that VDSL / VDSL2 technology is what underpins the Fibre-to-the-Cabinet ( FTTC ) service, which is what BT has adopted for the bulk of its own superfast broadband rollout around the UK. But JT's project does still have one thing in common with BT, its critics are growing.

Rival Airtel-Vodafone recently suggested that the work could be achieved for less by using Mobile Broadband (4G) technology. Now JT's arch rival, Sure (Cable & Wireless Jersey), has suggested that the existing copper network does the job just fine. Sure also believes that the new FTTH platform won't be as open to rivals and that SoJ should not be helping to fund the project (potentially anti-competitive). It should be noted that JT's rebuttal (below) came a few days before SoJ's announcement above.
JT's Rebuttal of C&W Criticism (Read JT's Letter [PDF])

1. The investment in a fibre to the home network will be made entirely by JT, not the States of Jersey. JT will fund this programme from its own resources, but has agreed with its shareholder measures to strengthen its balance sheet.

2. That the network will be open to all operators on a fair and equivalent basis, with access independently regulated by the JCRA, as is currently the case and as has been stated since the project was first conceived.

3. The cost of the fibre broadband services will be competitive by international standards, and a key objective is to ensure such pricing attracts the development and use of innovative and bandwidth hungry services; ; it makes no sense at all for JT to price a service at a level which is unaffordable to its target market.
It goes without saying that point no.1 is technically accurate but then the SoJ is JT's primary shareholder, which makes it very easy to understand C&W's concern.

JT’s CEO, Graeme Millar, commented:

"It was disappointing to see the global operator, and our competitor in the Channel Islands, Cable and Wireless, appear to put their commercial concerns ahead of an investment in the future of Jersey’s infrastructure. Their preference for maintaining a copper network in Jersey is also at odds with their public position in other jurisdictions, such as Macau, where they are the ones installing a fibre network."

C&W's concerns are unlikely to have much of an impact on the project, not least because SoJ is very keen to see it move forward. New fibre optic cable is already going into the ground and, with funding issues resolved, JT can now proceed; although it'll still be a few years before everybody can access the service.

UPDATE 19th December 2011

Jersey Telecom has offered 500 island homes in La Moye, La Rocque and Fauvic the chance to trial its new 40-1000Mbps fibre optic services free for 3 months (begins 3rd January 2012).

http://www.jtglobal.com/Jersey/Personal/Broadband/Products/Gigabit/Register-your-interest-/
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