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Vodafone Shelve Possible Openreach UK Fibre Deal, Moot Comcast

Wednesday, November 14th, 2018 (9:27 am) - Score 3,489
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The CEO of Vodafone Group, Nick Read, has told a meeting of investors that, at the wholesale fibre broadband ISP level, they’re “not engaging” with Openreach (BT) any more “in terms of any further opportunity,” which puts pay to earlier predictions of a new co-funded FTTP build. But they would talk to Comcast (Sky).

The context for all this stems from an earlier report in 2017, which claimed that Vodafone was in “early but serious” discussions with BT about the possibility of a co-investment deal (here). A deal like that could have seen the two arch rivals working together in order to expand the coverage of 1Gbps capable Fibre-to-the-Premise (FTTP/H) broadband technology across urban parts of the United Kingdom.

However the prospect for such a deal suffered what seemed to be a knock-out blow after Vodafone announced its support as an ISP partner for Cityfibre’s £500m plan to build a 1Gbps FTTH network to cover a “minimum” of 1 million UK homes by the end of 2021 (here). This has recently been boosted by a £2.5bn investment that will push the roll-out to 5 million premises across 37 cities and towns by the end of 2024 (here).

At the time Vodafone didn’t officially say whether this meant that an alternative arrangement with Openreach was now off the table (although logically it did) and instead kept their options open. Yesterday the operator was challenged on this by another analyst, who subtly queried the prospect of Vodafone working with other builders of fibre optic networks in the UK.

Nick Read, CEO of Vodafone Group, said:

“So what I would say is just from a wholesale perspective. CityFibre is gearing up, 10 cities, good progress. We are happy with the engagement we have with them. We have signed with BT the sort of – what would you call it – contingent model or whatever, which doesn’t compromise the execution that we’ve got with CityFibre or our commitment with CityFibre. So we felt we could do the same.

In the end, if we wanted to pull away from the BT deal, we’d just lose the discount. So it’s not strategically impairing us, if you like. And we’re always open to other players that want to consider other models. So, for instance, if a Comcast guy suddenly said, okay, we want to consider.

The one that’s been pretty quiet at the moment, I would say, is Openreach. We’re not engaging with them at the moment in terms of any further opportunity.”

The “contingent model” mentioned above sounds like the same volume discount arrangement that Sky Broadband recently signed (here), which is based off Openreach’s new wholesale offer to ISPs for cut price FTTC, FTTP and G.fast broadband services (here). But at the time of writing it’s unclear whether this focuses upon anything more than their existing FTTC (VDSL2) superfast broadband packages.

Vodafone’s continued support for Cityfibre makes absolute sense, particularly since they have precious little to lose under that agreement. On the other hand Openreach are gearing up to cover double as many premises with their own flavour of FTTP and that coverage difference could become more attractive in the future, although the two rival networks are still very far apart in terms of cost vs performance.

Meanwhile the hint toward Comcast should probably be taken with a pinch of salt. So far Comcast has only expressed a strong interest in harnessing Sky’s content business and they appear to be comfortable with Sky Broadband’s aforementioned Openreach deal, which suggests that for the time being Comcast probably won’t be shaking up the UK’s fixed line infrastructure market.

Separately Nick Read also touched on Vodafone UK’s long stalled plan to launch a Pay TV (IPTV) service, which was shelved a couple of years ago. Nick said they still “want to overlay TV in the future” but they’d rather get the fixed broadband side right first before even considering anything else. “Get commercial traction, build confidence, in the eyes of the customer and then take it to the next level,” concluded Nick.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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3 Responses
  1. S Wakeman

    The thought of Comcast arriving and shaking things up in the market isn’t a prospect to be relished. I’ve read a lot about them from customers over the years and not one single thing has ever put them in a positive light.

    Maybe it’s harsh to judge them without first hand experience or coming from a comms market that is significantly more broken than ours is. But still. There’s got to be a reason nobody ever says good things about Comcast.

    • CarlT

      They have their flaws for sure, however they have already deployed IPv6 and very nearly finished deployment of DOCSIS 3.1 to their entire North America footprint: 58 million premises passed.

      Virgin Media are yet to deploy DOCSIS 3.1 to 58 premises and haven’t started production rollout of IPv6.

      There: someone said a couple of nice things about Comcast.

  2. Dennis Rushforth

    I city fibres install fine and mast were I lived but there no big businesse in the area so how work in that area of Huddersfield I don’t know

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