Q4. CityFibre’s similar network in Bournemouth has struggled to be adopted, which appears to show that ISPs need to offer more than ultrafast speeds in order to compete effectively with established cable/FTTC networks (we note that BT also has a little FTTP in York).
How will the service in York differentiate itself and overcome the problem of low uptake in an already competitive Next Generation Access (NGA) market area, especially considering that York – like Bournemouth – also has strong availability of rival cable and FTTC networks?
ANSWER:
In Bournemouth, CityFibre’s ISP service, Gigler, was established to showcase the benefits of fibre Gigabit to the home. CityFibre’s intention has been to work with larger ISPs in the UK and as such we’re delighted to be part of this joint venture with TalkTalk and Sky.
We’re confident that given the array of expertise possessed by all partners and the fact the FTTH infrastructure platform is cutting edge, will mean that the Gigabit speeds rolled out in York will be amongst the best in the world. Sky and TalkTalk together already serve 45% of all broadband customers in York, and we believe these customers will migrate to the superior platform quickly.
There will of course be further service propositions incorporated into the network that will be announced in due course.
Q5. The current “city-wide” roll-out plan for York talks about a commitment of £5m each from Sky and TalkTalk. However the initial phase has so far only stated an expectation to reach 20,000 (premises passed) properties in 2015, although York is home to more than 80,000 premises in total.
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Does the current investment cover the full “city-wide” deployment or will more be needed in order to achieve that and is there any rough timescale for how long it might take to reach all 80,000?
ANSWER:
The initial investment of £5 million each from Sky and TalkTalk is for the first rollout of network services to homes in York. There will be second phase of investment to extend this rollout to further premises’ in the city, which will be announced in due course.
Q6. The announcement said that another two cities are likely to see a deployment (we’re guessing existing CityFibre network areas like Bournemouth and Peterborough). But when and how will you make the decision about where to go next, if anywhere (we assume the plan would not be expanded unless York is successful)? Is there a specific uptake target etc?
ANSWER:
The model we are adopting mirrors the roll out of similar high speed, fibre optic services in the US by Google. That plan started with one city, subsequently expanded to three cities and Google recently announced plans to engage with over 30 more cities. We believe a similar approach can be adopted in the UK.
York is the first city in our master plan and our initial intention is to expand to a further two more in the short term. The selection of these next two cities will be based on on-going engagement with local authorities and most importantly the enthusiasm they show to be part of our plans. Further details, including the steps we are taking in making this selection will be shared in due course.
Q7. If a customer wants to take the new service, roughly what will it cost to install and what would be involved in that process (will their garden or drive-way need to be dug up etc.)?
ANSWER:
Customers who want to take advantage of these ultra-fast Gigabit speeds will require the installation of a state of the art fibre connection directly to their premises.
Service propositions from both TalkTalk and Sky will be ultimately competing against each other and the details of each offering will be announced later in the year.
Despite the fact York’s new network will deliver a huge step change in in broadband capability, we expect both TalkTalk and Sky’s offerings to be highly competitive prices that are very attractive to end users.
Q8. Many modern broadband routers would struggle to deliver the top speed of 1Gbps reliably, not least due to inferior wifi performance. Even some of the best 802.11ac kit struggles when you actually ask it to do 1Gbps. Can you tell us anything about the hardware you expect to use in order to overcome this?
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ANSWER:
We are building fit for purpose fibre infrastructures that not only cater for today’s bandwidth needs but also support the exponential growth of data usage. Looking at the rapid technological evolution that the world is experiencing – from smartphones to televisions and beyond – there will be a need for gigabit connectivity and the access technologies such as gigabit Wi-Fi will quickly catch up. The deployment of this end-to-end fibre network will be delivered over an 18 to 24 month period. we’re confident that by the time this network is complete there will be adequate modem and router technology available to support it.
Q9. Can you reveal any-more about the staging of the planned roll-out? In other words, can you give us any idea of which areas in York will be the first to benefit and which will be the last as part of the first 20,000 premises?
ANSWER:
Planning for network construction is currently underway and the precise roll out schedule will be determined as a result. All parties will work closely with the community to gauge the enthusiasm of York’s community to ensure we maximise the benefits that this transformational infrastructure deployment will bring. We will continue to provide updates as our planning process evolves.
Q10. Finally, TalkTalk’s CEO, Dido Harding, recently spoke of her aspiration to push the FTTP/H network out to 10 million homes across the United Kingdom. At present the ISPs balance sheet might struggle to afford this, although over a 10-15 year period it could be viable (depending upon uptake).
However some suggest that it could be premature to speak of such things before the York deployment has been proven. So is this likely to become a real commitment or just something intended to ruffle Ofcom and BT’s feathers in the hope of securing a more favourable regulation of FTTC?
ANSWER:
Given this deployment in York is the first by this joint venture it is in many ways a trial process with particular emphasis on testing and implementing scalability. Once our success in York has been measured, there is no doubt that the experience gained in the city will be past on to other cities, as we have previously made clear.
Sky, TalkTalk and CityFibre are truly dedicated to being at the heart of connecting regional Britain and this is simply the first step on that journey, and all three organisations are in pristine financial health. Sky and TalkTalk have strong cash flows from their combined nine million broadband customers that can underpin long-term infrastructure financing, meaning that an FTTP/H infrastructure can be rolled out with minimal impact to their balance sheets.
From a regulatory point of view, it is important that Ofcom supports a competitive market that delivers private investment in our broadband networks. Digital infrastructure competition will bring rewarding long terms benefits to the UK, and Ofcom must enable a regulatory environment to achieve this.
End.
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ISPreview.co.uk would just like to thank Mark Collins for being kind enough to engage with our questions and for offering some useful insights into the project. Developments like this, if successful, have the potential to shake-up the market and give BT some real competition at the critical infrastructure level, but such changes won’t happen overnight and usually form part of a much longer-term strategy that will ultimately be dependent upon uptake.
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