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UPDATE11 £50m BT Plan to Upgrade Broadband in UK Cities Starts in London

Thursday, September 10th, 2015 (8:10 am) - Score 2,572

After 20 months of waiting BT finally appears to be progressing its pledge to spend £50m on expanding the commercial roll-out of superfast “fibre broadband” (FTTC/P/B + FTTrN) services to 400,000 extra premises in UK cities, with the first to benefit being in London (Kensington, Chelsea and Tech City etc.).

Today most of BTOpenreach’s network expansion beyond their original 66% UK commercial coverage footprint has predominantly been conducted through the state aid fuelled Broadband Delivery UK programme. But the operators commercial roll-out has continued, albeit at a seemingly reduced pace and with a tighter focus on specific areas.

One key example of this surfaced in January 2014 when the operator announced a £50m plan to expand their “fibre broadband” service to another 30 cities (here), although as we reported in June 2015 this particular 3-year roll-out project appeared to have been announced and forgotten (here). The 30 cities aspect has since been replaced by a focus on London.

At the time BT told ISPreview.co.uk that their commitment still stood, with some of the money having recently been spent on trials of new broadband technologies in London (e.g. FTTrN and Fibre-to-the-Basement etc.). In addition, they promised to “update people on specific roll-out locations in due course“.

The good news is that the first 30,503 homes and businesses of the 400,000 goal have today been announced and few will be surprised to learn that they’re all in London. Over the next two years some 20,213 are expected to benefit in the Royal Borough of Kensington and Chelsea (total coverage of 80,000 premises in the borough), while another 10,290 will benefit in Greenwich (total coverage of 100,000 premises in the borough). We’ll also be able to confirm more areas later (scroll to the bottom).

BT claims that its full roll-out will increase overall fibre availability across London, pushing upwards from around 90% to roughly 95% of premises (Openreach’s network alone will hit 90% in two years, while the remainder will be covered by alternative networks like Virgin Media). It should be said that Virgin Media also overlaps with a lot of BT’s urban network.

Joe Garner, CEO of Openreach, said:

Openreach engineers have been working flat out to bring fibre to more than 23 million homes and businesses across the country in record time – and the number is continuing to grow rapidly. Our investment has helped make the UK’s broadband infrastructure among the best in Europe.

Installing fibre in urban areas can be challenging, but thanks to new techniques and extra investment we will now be able to reach hundreds of thousands of additional homes and businesses across London.”

Good news then and indeed this also marks the first confirmation of both the commercial FTTrN and FTT-Basement roll-outs having started, although we note that BT’s investment focus appears to have changed a bit from the original plan.

BT’s New Investment is Focusing on 3 Areas:

• Upgrading city cabinets that weren’t part of the original commercial plans due to technical challenges or local planning restrictions.

• Rolling out ‘fibre to the remote node’ (FTTRN) and to fibre broadband cabinets that serve multi-dwelling units, such as apartment blocks.

• Continuing to ensure the new fibre network is available on an ‘equivalent’ basis to all internet service providers that use the Openreach network. That means companies competing with BT Consumer and BT Business can deliver faster broadband to their customers, paying Openreach the same as BT’s own divisions.

Broadly speaking the above “focus” is similar to the original announcement, except the original’s third commitment seems to have vanished: “Laying further fibre – including ‘Fibre-to-the-Premises’ [FTTP] technology – to new build sites in cities.”

Instead BT appears to have opted for a cheaper, faster to deploy and more hybrid-fibre dominated approach through their FTTrN and FTT-Basement solutions, with ultrafast FTTP getting no mention. This perhaps isn’t surprising given the forthcoming deployment of 500Mbps G.fast tech, which will be easier to upgrade into an FTTrN/B style setup.

At launch the theoretical peak service speeds will thus mirror the up to 80Mbps offered by their popular FTTC solutions, since both FTTrN and FTT-Basement will initially use the same underlying VDSL2 technology over copper lines (the line that runs between cabinets and homes/businesses).

On top of that BT also claims that “London is already one of the best connected cities in the world, with every business in the capital able to access speeds of 1Gb/s and above through special high capacity ultrafast dedicated lines“, although leased-lines are generally far too expensive for the bulk of smaller businesses to even consider.

The big question now is what about the other 29 cities where BT pledged to spend part of that £50m? London was an obvious first choice, but the 30 cities figure isn’t even mentioned in the latest update. Likewise today’s news also makes no mention of the original commitment to enable another 400,000 premises.

UPDATE 3:26pm

BT has just confirmed several other areas in London that will benefit from the above project, starting with an additional 2,187 in the London Borough of Barking and Dagenham (brings the local total to 72,000 premises). On top of that 9,368 will benefit in Croydon (total 140,000) and we expect more to be announced over the coming days / weeks.

UPDATE 11th September 2015 (6:40am)

An additional 19,106 premises will also receive the service in Bexley, which should take the local total to 98,000 premises passed. Similarly London’s Tech City area, which spans parts of a number of London boroughs from Hackney to the City of Westminster, will overall see upgrades for an additional 32,000 premises (taking the local total to 82,000 premises).

Finally there’s a mention of Barnet, which will see expansion to another 7,779 premises (total 145,000).

UPDATE 15th September 2015

As expected BT has announced some additional areas. Firstly, some 12,000 premises in Wandsworth (total coverage after completion of 130,000), then 4,200 extra in Hillingdon (total 105,000 premises) and finally 7,200 in Hounslow (total 96,000).

UPDATE 16th September 2015

Some 12,790 premises in Hackney (total coverage of nearly of 100,000) have also just been added to the list.

UPDATE 17th September 2015

Another day and yet more upgrade announcements for London. Some 8,000 additional premises will be reached in Waltham Forest (total of 100,000), while another 1,000 are to benefit in Havering (total of 100,000 premises again). Kind of wish BT would have just given us a general summary.

UPDATE 18th September 2015

Some more upgrades have been confirmed.

Hammersmith and Fulham – 6,629 extra premises (77,000 total)
Ealing – 4,275 (127,000 total)
Enfield – 2,706 (118,000 total)
Brent – 7,276 (115,000 total)
Haringey – 7,276 (115,000 total)
Harrow – 3,467 (87,000 total)
Islington – 16,300 (82,000 total)
Lambeth – 12,200 (123,000 total)
Richmond – 18,000 (83,000 total)
Kingston upon Thames – 2,000 (65,000 total)
Merton – 7,700 (82,000 total)
Sutton – 5,000 (81,000 total)
Tower Hamlets – 25,000 (98,000 total)

UPDATE 21st September 2015

Today it’s the turn of the London Borough of Newham, which will see an additional 4,000 premises connected (total of 106,000).

UPDATE 23rd September 2015

Today BT has added Camden to the list with an extra 17,165 premises set to benefit (total of 88,000). It’s starting to look as if most or all of that £50m is being spent in London, with the other 29 cities likely to be conveniently forgotten about (that’s probably why they weren’t mentioned in the PR, just as we feared).

UPDATE 24th September 2015

Finally, BT has now announced that it will also bring “fibre broadband” to more premises in the central City of London area, although they don’t say how many will be added.. except that the total will come to just 5,000.

UPDATE 25th September 2015

Some 18,000 extra premises in Southwark will also be reached (total of 101,000).

UPDATE 15th October 2015

After a long pause BT has today confirmed that they will also make the service available to an additional 39,874 premises in Westminster (total of 106,000), although it’s not clear if these additions cross over with the previous ‘Tech City’ expansion mentioned earlier as that area extends into the same location.

Separately Bromley will see another 9,444 premises being put within reach of the service, which takes the total for that area to 130,000.

At this point more or less all of the 400,000 planned premises have been announced.

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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 Twitter, , Facebook and Linkedin.
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27 Responses
  1. Avatar NGA for all says:

    So this is in-fill in the 66% they have claimed to have done, so the 30,000 is about 75 more cabinets, and 40,000 is a total of 1,000 cabinets. 30 cabinets per city?. The in-fill is welcome. So this will bring total commercial deloyed cabinets to 51,000.

    They are still claiming each cab costs £50,000 (£50m/ 1000 ) when the NAO identfied the running total average at less than £25k.

    1. Avatar TheFacts says:

      You are assuming 400/cabinet. Why? More like 200 for some city cabinets.

      This is why many suspect your figures.

    2. Avatar fastman says:

      his figures don’t include the opex cost of the programme — the 2.5 would have been a mix of Capex (build stuff) and opex design / manage / deploy / run etc

    3. Avatar NGA for all says:

      @FAstman you need to provide a split if this if you claim is to hold. The Cartesian work for Ofcom on Cost attribution, includes some insight into the NGA cost attributions. For 2013/14 data you can get no where near the £50,000-£60,000 BT is claiming for its commercial activity. The FTTC maintenace(PG953M and FTTC service development(PG197A) costs are also tiny.

      If you can get to half this amount you will be lucky.

      @The facts The 400 comes from 19m homes divided by the 50,000 cabinets BT CEO uses in his presentations. If it was 200 premises it would not be viable hence the subsidies in rural!!

      1,000 extra cabs or FFTrn are good, the job needs finishing, even if you double the number it shows the level of gaps needed to complete the job.

    4. Avatar NGA for all says:

      @Fastman, if you can provide a list of BT’s CL and PG codes when referring to these costs, then perhaps I can reconcile with what your saying. All costs including your operational costs have to be attributed to the codes assciated with NGA in the Residual Wholesale market in BT’s accounts.
      The amount of money has to convert into a number of stuctures seving customers, so an estimate is not too much to ask for?

    5. Avatar TheFacts says:

      @NGA – clearly 400 is an average. BDUK cabinets vary from 80 to 500.

    6. Avatar NGA for all says:

      @Facts, if the principal of gap funding was being applied, then no subsidies in general would be needed when passing 500 premises, 8-9% take up would fill the first card.
      But it is good to know 500 premise missed the commercial programme.

    7. Avatar TheFacts says:

      @NGA – you fail to understand that deployment must depend on location and existing infrastructure. This 500 could be in a remote village and may or may not be part of a cluster of cabinets.

      Simply dividing numbers is not a way to reach a conclusion.

    8. Avatar Gadget says:

      @NGA – what about the instance where perhaps the cost of power was extremely high, perhaps tens of thousands of pounds? whilst in general a 400-500 line cabinet would be viable there will be cases where it is not.

    9. Avatar New_Londoner says:

      @NGA
      Mike, most of your comments against this story are way off topic as BDUK is not relevant here. Some betray a real lack of understanding anyway, for example your suggestion that a cabinet connecting 500 premises should always be “commercial” is nonsense. And some such as your continued reliance on referencing the NAO cost average show a lack of understanding of both the context of that data and of statistics.

      I see Andrew is challenging many of your posts on Think Broadband now, calling out references to documents that in fact don’t contain what you claim. At best many of your assertions seem to be based on extrapolation and some pretty gross estimates, so in reality either contain a very large margin of error or are just plain wrong, using the 500 premise cabinet as an example.

      Perhaps it’s time to comment on something else, accept your knowledge base isn’t quite as comprehensive as you thought or has dated somewhat since your time in the industry. In the words of a well known song “let it go”. 🙂

    10. Avatar NGA for all says:

      @New Londoner @Facts
      It is good c16000 cabinets have now been installed. It is good that costs are now actuals and not the proxy costs visible in Wales and North Yorks.
      It is good the 38% excess modelled costs have been identified enabling every county to report underspends.

      But this leaves a number of fundamental questions neither you or Andew or whoever are willing to answer;
      The £3bn ‘investment’ claim is fundamentally at odds with only 50,000 commercially delivered cabinets. These are your CEO figures.
      There is no visibility not even a trace of the £1bn investment promised to Parliament apart from the belated £100m adjustment in BT accounts last quarter.
      How much of the £800k promised to Rutland had they access too?
      Last week, at a scrutiny meeting in CDS a BT rep was asked how much of the £40m promised to CDS was paid. His response was he did not know! Is this good enough?

      Sure you can pick on the 500 premises issue, but the principle of gap funding, key to the state aid measure is nowhere to be seen. It is also key to ensuring the available funds go as far as possible and taxpayers are not shortchanged.

      Sure the extrapolations will not meet academic standards but we can only work with the data that has been extracted from BT and use it to peel back another layer of the onion. The data available supports the notion that BT evidence to PAC in 2013 was no more than a gambit.

    11. Avatar Gadget says:

      @NGA and yet none of the audits (which are no doubt required by contract and to comply with State Aid) raised any issues about BT invoices or contribution AFAIK. Could that not suggest that there is no issue other than the desire to check the recognised and professional audit system?

    12. Avatar New_Londoner says:

      @NGA
      “How much of the £800k promised to Rutland had they access too?
      Last week, at a scrutiny meeting in CDS a BT rep was asked how much of the £40m promised to CDS was paid.”

      Sorry Mike but these comments suggest you have a fundamental misunderstanding about this so-called gap funding. You appear to expect to see evidence of a payment of £800k to Rutland County Council, which is just plain wrong. The reality should be that the council funds any excess costs above the maximum commercial level that generates the rate of return specified within the contract, but with the council’s exposure limited to the level stated in the contract.

      In other words, the supplier (BT in this example) has to fund any cost overruns and so is incentivised to deliver efficiently whilst any savings are shared with the council. In addition the council gains if take up is higher than projected and generates returns above that specified in the contract. If only the public sector used this model more widely, rather than taking your approach of spending up to the available budget regardless of value for money.

      So BT has to fund the base costs itself, invoicing the council for the “uneconomic” element, backed by evidence etc. That being the case, why would you expect to find evidence that Rutland County Council has had access to £800k?

      And as for your often repeated 38%, posters here keep reminding you that this was based on a sample of costs at a point in time. You ought to understand that the “saving” would be expected to diminish as contracts reach further into the more rural areas and the costs per premise naturally increase. In other words, it is nonsense to exptrapolate future savings using the 38% as a constant.

      You also appear to think that the 38% is evidence of some sort of conspiracy when others have repeatedly explained the difference between pricing for a single contract versus economies of scale in delivering across a wider area. Also, any cost saving anywhere in the public sector is to be celebrated not condemned, bearing in mind it is actually * our * money as taxpayers that is being spent!

      Please leave the experts in BDUK and the councils to audit the costs and post about something else. I’m sure you know lots about other subjects., could share real expertise.

    13. Avatar NGA for all says:

      @New Londoner

      Thank you ..’So BT has to fund the base costs itself, invoicing the council for the “uneconomic” element, backed by evidence etc’

      This is where the challenge is needed. There is no evidence of this base cost being met to any measure. Under your definition all areas could be uneconomic and all costs presented.

      The significance of the 38% is that it allowed the envelopes for billable costs to be expanded.

      You need to produce evidence of your base costs. There is no evidence in the Cartesian report on cost apportionment to suggest or indeed in BT’s accounts that these base costs exist.

      BDUK and the councils do not I think have access to your base costs as these are self-cetifiable.

      The ex-Ceo of Openreach now left is being rubbished by BT for her £100k per cab comment used throughout the autumn of 2013. Your now needing to defend some notion of £3bn /50,000 cabinets; – £50k-£60k a cabinet and fibre path. I believe this to be equally in-accurate and the cost for comemrcial is less than that identified by the NAO for rural, and this can verified in the Cartesian work and ofcom work on cost apportionment.

      If you are quoting base costs, describe the PG these are assigned too.

    14. Avatar New_Londoner says:

      @NGA
      Sorry Mike but you’re just rehashing comments made earlier. Repeating the same thing numerous times does not make it right.

      You’ve demonstrated on here and on TBB that you don’t understand either accounting or gap funding, nor do you have any evidence that anything is amiss. Please leave it the the professionals in BDUK and the councils to audit the costings that are presented to them, remembering that BDUK can compare different contracts to look for anomalies too. Trying to do their job with neither the information nor expertise is pretty pointless.

      I’ll leave it there as this is after all totally off topic.

    15. Avatar NGA for all says:

      @New Londoner
      Some basic and fundamental questions on funding remain outstanding. It is unlikely they can be dealt with when LA and BDUK are somewhat captured by a process rapped in confidentiality agreements.

    1. Mark Jackson Mark Jackson says:

      So far they’ve only confirmed that as an “in principle project” to roll out Superfast Broadband over the coming months. Still waiting for a firm announcement.

    2. Avatar Henry says:

      The press releases say:

      “BT’s new investment is focusing on three areas:

      * “Upgrading city cabinets that weren’t part of the original commercial plans due to technical challenges or local planning restrictions

      * “Rolling out ‘fibre to the remote node’ (FTTRN) and to fibre broadband cabinets that serve multi-dwelling units, such as apartment blocks

      * “Continuing to ensure the new fibre network is available on an ‘equivalent’ basis to all internet service providers that use the Openreach network. That means companies competing with BT Consumer and BT Business can deliver faster broadband to their customers, paying Openreach the same as BT’s own divisions.”

      In Rotherhithe, Hyperoptic now serves many of the apartment blocks (and the South Dock marina), including block with a BT cabinet outside which has not yet been upgraded even though BT has fibre within 20 metres, so BT’s expansion may tend to provide more competition where a service is already available, rather than concentrating on terraced houses with no superfast provision and on long slow EO lines from Bermondsey. BT has installed a micro-cabinet for FTTrn serving 16 premises in Gwent Court, but it is difficult to see how this is a more cost-effective solution than a larger network rearrangement with big cabinets for the thousands of unserved houses concentrated in a couple of square kilometres.

  2. Avatar fastman says:

    NGA

    the business has made the statement on the 2.5 whether you choose to accept that is then up to you

    I got more villages to deliver !!!

    1. Avatar NGA for all says:

      You will get to deliver to even more villages as the truth about the costs emerge. The statement on £2.5bn or £3bn is inadequate.

  3. Avatar fastman says:

    But it is good to know 500 premise missed the commercial programme — that’s assuming they are all on the same cab — which they are plainly not !!!! so there may be 100 here and 150 there and 140 and 160 somewhere else so you actually talking around a number of structures — you seem to have understanding of numbers from a theoretical sense but no understanding of technical deployment and actual deployment reality and where premises actually are in relation to the structures you need to deploy — Rotherhite is a good case in point — high EO — disparate block — limited existing street furniture, so you almost have to work from scratch

  4. Avatar Ignition says:

    Things like this put the cost of FTTP versus FTTC into perspective. Even on these ‘more difficult’ areas requiring non-standard solutions the CapEx is still only ~£125 per premises passed.

    Virgin Media are budgeting ~£500 per premises passed to deliver the early infill and new builds in Leeds, Manchester and Nottingham and overall £750 per premises in their network extension project.

  5. Avatar David says:

    More city upgrades, in north Wales we can get about 2mb connection. So upgrades in rural areas would be nice.

    1. Avatar New_Londoner says:

      @David
      The rural upgrades are happening too, with BDUK adding 40,000 premises a week IIRC.

  6. Avatar Damain Belson says:

    It states in the article that the £50m will be spent on providing faster services to 400,000 extra premises in 30 UK cities. Have you got a link to where BT mentions this bit?

    Adding up the London borough figures and guestimating the totals for the remaning 5 it looks like London will be getting well over 300,000 of the new connections. Doesn’t leave much for the other 29 cities!

    1. Mark Jackson Mark Jackson says:

      In a way that’s exactly what we’ve been hinting at above, it’s become a London centric thing. But officially BT won’t say they’ve forgotten about the other 29 cities, even if the writing appears to be on the wall.

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