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Evolution in Fibre Optic FTTP Broadband Deployment Could Cut Costs by 10%

Friday, November 16th, 2012 (12:39 pm) - Score 1,919

Ofcom has published a new Analysys Mason report that examines the cost of various civil engineering technologies for deploying superfast fibre optic broadband ISP services in the United Kingdom. It reveals that roll-out costs could be slashed by 10% if some of the latest innovations were adopted by BT and others.

The report, which is not to be confused with a similar EU study from earlier this week (here), suggests that developments in this area tend to be “evolutionary rather than revolutionary in nature“. But even a cost reduction of around 10% could have a significant impact because infrastructure deployment isn’t cheap and accounts for around 80% of the overall expense (estimates vary).

Analysys Mason Statement

We have estimated the cost reduction that could be realised from adopting slot-cutting, optimised mole-ploughing and aerial cables on a wide-scale in the UK. As a baseline, we have taken Analysys Mason’s estimate for the cost of nationwide FTTP GPON coverage from the work we did for the Broadband Stakeholder Group, namely GBP24.6 billion. That total is based on the use of traditional civils techniques, and includes assumptions on duct re-use, volume of new-build, and unit costs for traditional install in different kinds of terrain.

By modifying the unit install costs (estimated using information received from interviewees during the course of our study) and also applying a ‘real-world’ deployment factor to reflect the fact that in practice each technique can only be applied to a percentage of eligible areas, we have estimated the potential benefit of the three techniques.”

At present the current deployment methods tend to favour underground installation.

fibre optic deployment cost savings uk

The study suggests that the use of slot-cutting in hard surfaces could potentially deliver a cost saving of GBP3 billion (12% of the total cost), whilst mole-ploughing could deliver a saving of GBP2.0 billion (8% of the total cost).

On top of that the use of aerial cables instead of slot-cutting and mole-ploughing in new build routes could deliver a maximum cost saving of GBP7.6 billion (31% of the total), although the report said it was “questionable whether aerial could be used at such scale efficiently“.

In addition the report suggests that these savings “only be delivered if the techniques were adopted by industry on a widespread basis“, which would apparently require “successful commercialisation of the relevant recent or expected technical developments“. Easier said than done.

Ofcoms Fibre Optic Deployment Cost Savings Study (PDF)
http://stakeholders.ofcom.org.uk/telecoms/policy/next-generation-access/..

Leave a Comment
5 Responses
  1. Avatar zemadeiran says:

    Mark,

    Where is the FibreFred vs Deduction Friday war of words?

    This is highly irregular and I fully expect you to take the necessary steps to remedy this lack of Friday word war professionalism on both their parts!

    I personally feel let down by both of them and now my weekend will start off with a whimper instead of a bang.

    1. Avatar Fibrefred says:

      I was going to say “ooo look GPON” but I’ve proven that one already. 2billion is a lot and a great saving but does little really when it comes to ROI

  2. Avatar zemadeiran says:

    Moving on to less important subjects….

    1. We all already know that labour costs money and the cost of a 100% national FTTP/B rollout will be 20B+

    2. Amortise said cost with government broadband bonds which pay a decent rate of interest and will raise the project’s public profile.

    3. Use the funds to buy out Openreach and bring it into public ownership which results in no vested interest and an Open network. (Purchase could also stipulate that funds are used for the elimination of the current BT pension deficit THEN the rest can go to shareholders.)

    4. GDP and employment increase will completely dwarf the initial cost massively.

    5. Slowly sell off the resultant copper and put the resultant funds toward creating a world class leading research and development park aka UK silicon valley which could encompass telecommunications, energy, medical and the rest.

    6. Help small locally focused isp start up’s

    7. Build more ixp’s.

    We have a stable society, let’s not only be a financial service’s economy…

    Good weekend to everyone.

  3. Avatar Bob says:

    A 10% saving is a very significant cost saving and would help to make more cabinets viable as well as improving ROI. Further savings could be made by BT improving theire very poor project planning which frequently leaves cabinets instaled for several months or more. Typical reasons for delays are blockages so it would be sensible to get the Fibre to the cabinet before placing the cabinet. TThis would also reduce delays in installing power as if BT misses the agreed date to install power to a cabinet it will be put back about 6 weeks as that is the typical lead time the utilities need to install power.

    Leaving Cabinets lying around the streets inactive is an expensive business as once the cabinet is shipped to BT they are invoiced for it. BT should be able to get a cabinet active within about a month if it did plan things properly rather than just muddle along.

    1. Avatar FibreFred says:

      I think you have mis-understood Bob, this is about FTTP , not FTTC (cabinets)

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