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Obstacles Remain as TalkTalk Dream 60% 1Gb FTTP Broadband Cover

Friday, Sep 26th, 2014 (8:30 am) - Score 1,351

The boss of TalkTalk’s business division, Charles Bligh, has confirmed that the ISP ultimately wants 50-60% of homes in the United Kingdom to connect via their new ultrafast 1000Mbps Fibre-to-the-Premises (FTTP) network. But in order for this to work Bligh admits that take-up will need to be 30-40% or higher and the cost per home must be below £500. Difficult.

Over the past year we’ve seen a growing number of alternative network operators, from utility firms to ISPs, entering the market for pure fibre optic connectivity. Indeed it’s starting to look like we’re in the midst of a welcome fibre optic broadband revolution, one where BT may no longer be the dominant force.

But so far most of those projects, except for a few involving new-build homes where deployment costs are less of a concern (much easier to do it before you build the houses), have been strictly demand-led. In other words, the service doesn’t get deployed unless enough locals express an interest first (e.g. Gigaclear, Hyperoptic etc.).

By comparison any ambition for a truly national deployment would need to relax the demand equation in favour of putting itself at the mercy of natural market economics and competition, which is usually where FTTP/H/B’s high deployment costs can become a problem.

Explained another way, the competition from slower but cheaper pre-existing broadband services (ADSL2, FTTC etc.) makes the case for FTTP/H/B a lot harder to make, unless we go back to the patch-work of strict demand based deployments or adopt B4RN’s ‘build it yourself’ social model (B4RN’s model works well in rural areas, but not so much cities where taxes, rules and other restrictions can be a bigger problem).

Some of these issues are likely to become problems for TalkTalk, which is currently working with Sky Broadband, Fujitsu UK and CityFibre to roll-out an experimental FTTP fibre optic broadband network across the city of York (starting with 20,000 premises). So far TalkTalk and Sky have contributed £10m to phase one of the project (here and here), which will make use of CityFibre’s existing network, and more will be needed later to reach the 80,000 premises around the whole city. It’s anticipated that two further cities will then be added, but this won’t be decided until next year.

Charles Bligh, MD of TalkTalk Business, said:

We have spent a couple of years talking about the BT rollout, but it’s an interim step in terms of really pure gigabit fibre. We’ve decided to put our reputation on the line, but also some money into this. We’re putting our money where our mouth is … We’re very deadly serious about making this go right.”

Bligh’s comments were made as part of a speech to Huawei’s Ultra Broadband Forum 2014 event in London this week, where he also revealed that the cost per home would need to be below £500 and that take-up would have to be in the 30-40% range or higher to make the service viable.

But achieving such figures is no easy task, much as BT’s well-advertised and affordable ‘up to’ 80Mbps Fibre-to-the-Cabinet (FTTC) technology has found. This is especially true in urban areas where many people already have access to 10Mbps+ speeds through ADSL2+, which while not especially fast is still clearly enough to keep a lot of consumers satisfied (so long as they only have to pay a handful of pounds for it). In effect, outside of cable areas, FTTC has been battling its cheaper but much slower ADSL2 predecessor.

In the future this will change and indeed we can already see a strong movement towards FTTC connections from the markets largest ISPs, while Virgin Media has also moved around 4 million+ on to their superfast cable platform that can dole out speeds of up to 152Mbps. However this will only make it even more difficult for FTTP solutions to find their footing, especially when forced to fight over the same turf.

TalkTalk’s approach with CityFibre hopes to counter this by offering ISPs access to the new network via wholesale, effectively positioning themselves as a direct competitor to both BT and the semi-separate BTOpenreach. TalkTalk also believes that their approach will be able to deploy FTTP at a cost that is not dissimilar to how much BT pays in order to roll-out FTTC, although this has yet to be proven. But even in the best case scenario we expect it to be a difficult battle, especially with a take-up goal of 30-40%.

On the other hand TalkTalk and Sky, combined, already account for approaching 10 million broadband subscribers and if correctly leveraged this could be converted into strong FTTP uptake. The ISPs also want their FTTP service to be cheap and competitive with existing FTTC prices, which if it works would be another bonus.

Put another way, if somebody offered you 1000Mbps for £20 you’d probably pick that instead of paying the same for FTTC’s distance inhibited speed lottery where you might get anything from 2Mbps to 75Mbps, depending upon your line quality and distance from the local BT street cabinet etc. Of course this is a simplification; the real-world is usually more complex with more things to consider than just speed and price. Not least with whether people will see a NEED for 1000Mbps.

It should be said that TalkTalk’s CEO, Dido Harding, has already spoken of her ‘aspiration’ to push their fledgling FTTP/H network out to 10 million homes across the United Kingdom. In that context Bligh’s remarks should be taken with a similar pinch of salt, but then that’s the purpose of the deployment in York, to test such ideas and attempt to confirm a workable model.

The first “technical trial” customers are due to connect in the next few weeks and the first full customers should then go live sometime during 2015, but none of the longer term plan is going to happen quickly. It will take years and bags of money to achieve TalkTalk’s coverage goal and we doubt BT will sit the battle out. But for now BT are probably just content to observe and wait to see whether TalkTalk, Sky and Cityfibre’s big experiment turns into a real threat or fizzles out into economic unviability.

Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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