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Study – £224bn Needed to Cover All EU Homes with 1Gbps Broadband

Monday, October 10th, 2016 (10:32 am) - Score 1,820

The European Commission has published a new Analysys Mason study that examines the cost of, among other things, providing 1Gbps capable fixed line broadband connections to all residential areas across the 28 EU member states, which for now still includes the United Kingdom.

The research is designed to support the new “Gigabit Society” strategy, which was announced last month (here). This pledged a new target for “all European households” to get a minimum line speed of 100Mbps+ by 2025, with businesses and the public sector told to expect 1Gbps+. The strategy also included mention of a USO for broadband and support for future 5G mobile connectivity.

The total cost of achieving all of the targets in this admittedly “non-binding” strategy was estimated to require an investment of €500 billion (£450bn), most of which is rather optimistically predicted to “come from private sources” (note: the EC also expect a “€155 billion investment shortfall“).

Today’s report is thus designed to complement the EC’s new strategy by examining how much the necessary infrastructure might cost to deliver through various different scenarios, which include some useful country-specific figures. In particular it focuses a lot of energy on the aspiration of deploying 1Gbps (1000Mbps+) capable “wireline” (fixed line) broadband to all homes, such as via FTTP/H or Cable (DOCSIS 3.1) technologies.

Scenario E: Home fibre connectivity

Our fifth scenario considers the provision of 1Gbit/s wireline connectivity to residential premises. We assume that residential areas are fully covered by wireline infrastructure, though the ‘final drop’ (the connection between the secondary connection point and the end user) is only made when a customer takes service.

The weighted average take-up across the EU28 is forecast to be 81% by 2025. We model the cost of providing this coverage to 80%, 90% and 100% of population areas. Similar to other scenarios, fibre deployed for previous scenarios (e.g. Scenarios A, C and D) can be re-used.

In Scenario E a series of assumptions have been adopted about the standalone cost model. On average 81% of households are expected to take broadband and 100% of these will connect via a 1Gbit/s network by 2025, which includes some users connecting via cable networks (e.g. Virgin Media) and excludes the cost of final connections to SEDPs (e.g. businesses).

The basis of coverage in Scenario E targets full coverage of the access network, at least up to the final node before the home in each area that is covered (the study models 80%, 90% and 100% of areas being covered). The final connection to the home is made when a customer takes the service.

Overall the study predicts that €77bn of the total fibre cost for Scenario E could be met by commercial deployments, which would leave €172bn left to be tackled (total €249bn).


The study notes that the cost of delivering Scenario E with 80% coverage would unsurprisingly be lower at €123bn, while 90% pushes this to €170bn and as usual the cost of tackling the final 10% of mostly smaller or more difficult to reach areas produces a huge increase to hit the €249bn total. It’s further noted that the €249bn total could potentially come down by as much as €30-40bn if +10% more cable duct could be re-used than in the base case assumption.

According to Analysys Mason, the deployment cost per subscriber of delivering Scenario E would also be lower in the United Kingdom than a lot of other major EU states, particularly in rural areas. For example, the rural cost per subscriber in the UK is estimated to be around €2,200 and it’s interesting to note how much cheaper this is than most of the other countries.


As you’d expect the short line lengths vs higher population density in urban areas produce much lower costs to connect a subscriber than the long line lengths in rural areas. Regarding the differences between countries, these are driven by a number of factors, including local labour rates, the availability of duct infrastructure, the take-up of broadband and the market share of the modelled operator (e.g. vs. the market share held by the cable network operator).


Sadly we don’t get a detailed break-down of how the figures were arrived at (this would have been useful), which is largely true of the full report that acts more like a general overview than a detailed assessment of each country.

Otherwise the rural figure of around €2,200 for the UK converts to £1,981 at today’s exchange rate, although the GBP to EUR exchange has recently collapsed. Never the less it’s worth noting that at lot of the Government’s Phase 2 Broadband Delivery UK projects adopted a model of £1,700 per household (taxpayer subsidy) and that often reflects a much slower hybrid-fibre solution.

The report may thus seem to be underestimating the cost of pushing 1Gbps via fixed lines into rural areas, although you can see from Figure 1.10 on the right that the UK “investment cost per user” does shoot up for the final 5% and peaks at just below €6,000. Overall the total UK cost prediction does in fact point to a familiar figure of around €28bn (£25bn).

In the end the total of €249bn represents the most wide-scale EU deployment possible, which might not necessarily be what the EU ends up adopting. As usual there’s also plenty of room for adjustment in such forecasts, depending upon the approach taken and the levels of existing network coverage or ducts shared etc.

At the same time we must not forget that a lot of EU states are still struggling to meet the existing Digital Agenda targets, which aims to ensure that very home in the EU can access a 30Mbps+ capable superfast broadband connection (plus 50% subscribed to a 100Mbps+ service) by 2020. The UK at least looks likely to achieve this (EU Connectivity Report).

Mind you there’s a big question over the UK’s future in all this given Brexit, which could complete by around Spring 2019. The UK might simply choose to ignore the new targets and be less ambitious, but hopefully the Government will work to keep us competitive. However that would require a lot of new investment, which so far they’ve been reluctant to commit.

EC Study – Costing the new potential connectivity needs

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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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28 Responses
  1. GNewton says:

    These figures come as a no surprise.

    For the UK it probably looks like this:

    Assuming a generous £25 Billion cost (upper estimate) for doing a nationwide fibre to all 26 Million households, this amounts to £961 per household. Assuming these investment costs are to be recouped over a 10 years period, this would mean roughly £8 per month and per household which seems entirely doable to me. The real figure could well be lower than that with improved deployment techniques for fibre.

    It would of course require a drastic reset of the over telecoms framework and regulatory environment, there is no space for the luxury of building multiple access networks, or keeping old copper-based networks in addition to fibre. You don’t have multiple power lines, water pipes, or gas pipes going into a premise. Why should a telecoms line be treated differently here?

    1. TheFacts says:

      @GN – true. Would anybody like to propose how we get to a single connection with upgrades and replacement of all the existing infrastructure. Including the commercial aspects.

    2. Mark Jackson says:

      TheFacts. You wouldn’t need to replace all of the existing infrastructure, but I assume you don’t include in your comment the fibre optic cables that FTTC and FTTN/EuroDOCSIS have already pushed nearer to homes and businesses?

      In the end it’s all a question of time and money, the details will flow around what’s made available. But who will cough up?

    3. TheFacts says:

      Which would require all suppliers to wholesale?

    4. Bob2002 says:

      I’m a bit confused when people raise the issue of expense regarding a national fibre network.

      I keep saying this, but I’ll say it again … we are running a deficit and yet we allocate around £11 billion a year to International Development, nobody can rationally justify that huge amount of spending on an area that will provide little quantifiable material benefit, it may be vanity politics, or virtue signalling, but it is not sensible(it is also ring-fenced when welfare for the sick and disabled was cut which was disgusting).

      If we halved the International Development budget for six years we could have a national fibre network that would last decades.

      Now add to that the extremely low rates governments can borrow at at the moment – assuming a different funding route was taken. The obstacles for a fibre network are small, it is a matter of political will, not money.

      Hammond has not been that bullish on a large infrastructure splurge, though that may change once(if?) “hard Brexit” occurs and there is a temporary period of turmoil – high speed broadband for all would be a great way to invest in the UK, cheer up the public, and buy votes.

    5. Steve Jones says:

      The payback period on that sort of infrastructure would be more like 20+ years, so you could argue that it’s about £4 per premises. However, you need to add cost of capital to that (and we aren’t talking about the silly rates the government can borrow at, but commercial rates). Investors will not put money into this without some form of return. Then the cost of this will be incremental to the existing network as both will be running in parallel for several years. Those networks will continue to incur operational and depreciation costs for many years to come. It will drop out eventually, but maybe not for 20+ years given any 100% FTTH rollout is going to take a decade even with a massive increase in labouforce. If you doubt that, look how long it took the old GPO & Post Office to extend the copper network after WWII – to complete that and get rid of party lines took 30+ years with a vast workforce.

      It has implications for existing service operators, what people have in their home. No migration like this is instant. It’s simply not possible to change networks instantly (it hasn’t in Jersey for instance, and that’s a tiny place).

      There is also the issue that if you are planning this as some legal monopoly network (even if it’s local ones), then there would be a big compensation bill to be paid to the commercial network operators who were displaced. (If there wasn’t some form of enforced move, many customers would just vote with their feet and stay with their existing services as they would be cheaper as they would be charged at marginal rates). If you don’t 100% takeup (near enough) it blows vast holes in the business case.

      It doesn’t greatly matter if its all done with public money or some form of government sanctioned local network monopoly. The costs of compensation will be huge. If you doubt this, look at Australia where the costs of buying out commercial interests for the NBN was a huge element of the costs, and that is in a simpler environment.

      The reality is that it will take longer, be much more complex and a great deal more expensive than you expect.

    6. GNewton says:

      @TheFacts: Yours are valid questions. Certainly your own idea you posted on ISPReview at the beginning of last year of having the government pay for all of this is totally unrealistic, especially in this current unfavourable framework.

      @SteveJones: Yours is just a reflection of shareholder’s interests. What are your proposals for changing the overall framework? Clearly the market forces and private companies won’t deliver widespread fibre, a new approach is needed.

    7. Evan Crissall says:

      Yup, a new approach needed — a new National Bank, issuing Public Credit for infrastructure investment, including universal FTTH.

      Abandoning the pathetic Quantitative Easing programme. A policy which sees the Bank of England (and FedRes) massively expanding the money supply for no gain whatsoever. Dishing out trillions in new cash to private banks, only for them to piss it up the wall in speculative trading.

      Replace that discredited QE programme with one that directly invests new money into the physical or real economy. The People’s Quantitative Easing, as some call it. £25 billion to pay for Fibre to Every Home in Britain is peanuts. Especially when you gauge it against the £1.3 trillion already frittered to date through the pathetic, yet ongoing QE policy.

      The ill-informed always wince at the very idea of Public Credit. It being a Labour concept. Or so they think.

      Yet Roosevelt (Democrat) successfully pulled the US out of the Great Depression through his Public Works Programs, funded by Public Credit;

      Abraham Lincoln (a Republican) used Public Creedit too. through the issuance of Greenbacks to defeat the slaveowners of the south in the American Civil War.

      And Alexander Hamilton (Federalist) and secretary to the US Treasury under Washington used Public Credit to rebuild America and restore her fortunes after she was bankrupted by the American Revolution.

      Public Credit is not even a ‘lefty’ thing. Not that the trolling BT interests here will acknowledge that. Their intellectual limit is regurgitating Daily Mail headlines. And those mind-numbing factoids acquired from years of mental programming by the corporates and the corporate-controlled media, for whom Public Credit which would eat at their obscene profits, is a dirty word.

    8. FibreFred says:

      ” Certainly your own idea you posted on ISPReview at the beginning of last year of having the government pay for all of this is totally unrealistic, especially in this current unfavourable framework”

      So why won’t the government pay for it?

    9. TheFacts says:

      @GN – please tell us your proposals.

  2. gpmgroup says:

    Even @ £25bn it would be massively more transformational thn HS2 and less than half the cost.

    Instead of benefiting the time savings on a few they could benefit virtually everyone through less congestion, less pollution, more personal time and a less London centric economy.

    1. TheFacts says:

      ‘massively more transformational’ Need to be sure about that where current speeds and availability have a number poorly served but a significant number actually OK.

      Anyway, it won’t happen soon.

    2. Evan Crissall says:

      For obvious reasons, BT (and Virgin) are praying that the Government never bankrolls universal FTTH. Not while they can sweat their corroded copper assets for every cent imaginable.

  3. Billy says:

    And much cheaper than a train ticket.

  4. GNewton says:

    A first step in finding a more appropriate solution would be to learn some lessons from past successful projects done in this country and elsewhere.

    How was it possible that much poorer countries like Estonia, Lithuania, or Spain have much more fibre installed than this country? How have people managed in this country to build the original infrastructures for electricity, water, and the telecom access network? What changes are needed to make it easier to re-use existing telecom ducts and poles? How can unnecessary duplication of access networks be prevented?

    IMHO the BDUK projects by and large were a waste of taxpayer’s money, and have not properly addressed longterm future-proof needs. Obviously some tend to disagree here. However, there certainly has been a market failure when a company like BT claims that large parts of the country can’t be economically served with fibre!

    1. FibreFred says:

      Do your homework as to how sewers etc were built. If you think it was all private company cash and not paid by the government via tax you will be disappointed

    2. TheManStan says:

      Estonia – government led programs put the infrastructure in… this started back in 1996…

      Lithuania – government led RAIN project… started 2004

      Spain – Proper competition, Orange, Telefonica and Ono (Vodafone), all investing in FTTP… Telefonica however has been investing in fibre for the last FIFTEEN years and didn´t have to wholesale (guaranteed ROI) until this year…

    3. TheFacts says:

      Estonia updated the targets and measures for broadband as part of its new Digital Agenda 2020 in early 2014. The strategy envisages full coverage with connections of at least 30 Mbps by 2020 and aims to promote take-up of ultra-fast subscriptions with at least 100 Mbps with the objective that these account for 60% or more of all internet subscriptions by the same year. Estonia is currently deploying a middle-mile network of fibre-optic cables. After completion, 98% of all residential buildings, companies, and agencies will be located within 1.5 km of at least one fibre network access point.


    4. FibreFred says:

      Poor examples Mr Newton…. poor indeed

    5. TheManStan says:

      Not that bad really, Spain is a good example where if wholesale is not applied it allows an incumbent to invest heavily.. no costs associated with supporting products for others… and it forces the competition to invest in their own infrastructure…

      And the 2 Baltics… where governments are proactive, although if I recall Estonia (it was one of the Baltic states) was the test bed in Soviet times for communications infrastructure so had really good duct all over.

    6. FibreFred says:

      The point is, there isn’t another country with the same set-up and history as ours. GNewton seems to think there is… or just overlooks a lot of things to make it fit

    7. TheFacts says:

      As in cable tv companies starting up resulted in BT not being allowed to roll out FTTP and using it for broadcast years ago and LLU in exchanges.

    8. GNewton says:

      Thanks for sharing your thoughts on this. Of course the frameworks and regulatory environments for telecoms are different on other countries. As can be seen from some of the comments, like TheManStan, it is worth to take a closer at some of the more successful countries, and to find out, what lessons can be learnt for here.

      @TheFacts: Your are rightly pointing out some of the past failures, however, for how many years has BT now been allowed to do fibre? Your link about Estonia certainly makes an interesting reading.

    9. AndyH says:

      When you look at countries that were part of the old Soviet blocks, you’ll find that the majority of people live in large apartment blocks (we refer to them as ‘concrete jungles’). It makes for quick and easy FTTB/H deployment, when you have so many people living in such concentrated areas.

      The other consideration is the cost of labour, where it’s not uncommon to find someone earning an average monthly gross salary of 500e.

    10. FibreFred says:

      More good points Andyh leading to more differences

      If it were as simple as following the model of country xyz it would have been done.

      lack of understanding and over simplification as usual

    11. TheManStan says:


      It´s irrelevant that FTTP hasn´t been a priority… the choice for BT, given the very late (2009) green light for entering the residential fibre market and the requirement for wholesale, means that to catch up in the market they HAD to use a fast deployment technology.
      Estimates for coverage if pure FTTP was used would be about 1/3 of the country… that´s lot of people on very crappy speeds… doing it faster isn´t on the cards as the expense becomes disproportionate and there isn´t the skills base in the economy. No other company in Europe has had the equivalent shackles of the Enterprise Act restricting the market they operate in…

  5. GNewton says:

    @TheManStan: About the requirement for wholesale: Is Openreach subsidised by other income source, from other BT owned businesses from the consumer frontend? As regards lack of skills: Certainly this can be addressed, or are you saying that schools, universities, colleges etc are not up to the task? I agree there has been a lot of enterprise restrictions for BT. And if that is the cause for the lack of fibre then certainly this needs to be addressed, too.

    @AndyH: Yours is a valid point about apartment blocks being easier to be served by fibre, so countries where more people live in apartment buildings have an advantage here. However, you will find that in this country, even for apartment blocks areas (and there are some around, e.g. in London) fibre coverage is lower than it could be. So there are other issues that need to be explored and addressed here.

    1. TheManStan says:

      There is no subsidy for OR operational costs. BT group can give more capital should they wish.
      Pricing is regulated in wholesale so OR has to prove costs to OFCOM and OFCOM decides the pricing, hence the annual changes announced by OFCOM rather than BTOR. BT units pay BTOR this pricing regime.
      Skills base, is related to the move to a service based economy and in my view the decision to do away with Polytechnics… There needs to be a demand for people to see education and training in a particular field to be attractive… this again relates to government initiatives… And as always my view is that lack of clear government strategy and support is the key reason for the state of UK BB infrastructure.

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