Home
 » ISP News » 
Sponsored

Openreach Warns of Car Crash for UK Gov’s £5bn Gigabit Rollout

Monday, August 3rd, 2020 (9:12 am) - Score 7,548
training_telegraph_poles_openreach_engineers

The CEO of Openreach (BT), Clive Selley, has warned that the UK Government’s proposed framework for how it intends to invest £5bn in order to ensure that “every home” can access gigabit-capable broadband (1Gbps+) by the end of 2025 is so complicated that it risks being turned into a “bureaucratic car crash.” Delays likely.

At present over 22% of UK premises can access a “gigabit-capable” broadband service (here) and it’s hoped that private investment will help to push this up to 70-80% over the next few years. As such the Government’s £5bn investment is being targeted toward the final 20% of hardest to reach (mostly) rural premises via a mix of different technology types (e.g. FTTP, DOCSIS 3.1, Fixed Wireless / 5G etc.).

NOTE: In this case the final 20% equates to around 6 million UK premises.

In reality it’s no secret that few people within the industry expect the Government to achieve universal coverage by the end of 2025, which is perhaps one reason why the political language has recently appeared to be watered down (here). As Matt Warman MP said last month: “we will work as hard as we possibly can to go as far as we possibly can by 2025.” We also haven’t forgotten when 2025 was a “full fibre” only target, before that got watered down too (here).

Last month we revealed a rough layout for how the Government’s (DCMS) Building Digital UK team are proposing to invest that £5bn (here). One element that stuck out was the way in which the BDUK team intend to split areas up into “bundles” of c.3,300 premises for procurement (categorised to identify the areas’ most in need and to also factor the cost of delivery via 11 different models).

On the one hand this may be more accessible to smaller alternative network (AltNet) operators, while on the other hand Openreach has been calling for bigger bundles (ensures economies of scale) and longer-term contracts. Certainly any process that involves potentially thousands of different LOTS across the UK is going to be complex (complexity also tends to add cost and delays) and Openreach aren’t happy.

Clive Selley, Openreach CEO, said (Telegraph – paywall):

“The early chatter has been talk of 1,200 or 1,400 lots … and that is just a bureaucratic car crash. For a big player, we want two or three contracts with a big price tag.”

Openreach is also concerned that it can take them 2 years to train up new engineers. Selley added that to build to an additional 3 million homes (with FTTP) beyond their current plan would require the recruitment of a further 7,500 engineers: “I have training capacity for 4,000 per annum, so we’d rather get going on Monday, not Monday 2021.”

In fairness it is possible to give a fibre engineer adequate skills in about 12 months (i.e. they don’t all need to reach the expert level to be competent in core tasks), but even that is still a long time and operators often don’t make forward hire decisions until they know investment will actually be coming their way (i.e. until contracts have been awarded). In other words, getting the framework ready is only part of the challenge.

On top of that the Government may not wish to see BT scoop up all of the contracts like they did in Phase 1 of the BDUK “superfast broadband” programme some years ago, which attracted a fair bit of criticism. But weighing against that is the fact that the earlier scheme did largely achieve its targets and not many major infrastructure projects can make such a claim.

At this point it’s often also forgotten that the Government’s 2018 Future Telecoms Infrastructure Review (FTIR) indicated that a large-scale “full fibre” deployment to cover the final 10% of premises would eventually require some £3bn to £5bn of public investment. The Government’s commitment of £5bn might thus be considered under-funding as it targets the final 20%, but much will thus depend upon the balance of technology choice.

All of this is before we consider the on-going delays to Ofcom’s next 5G mobile spectrum auction. Admittedly we have our doubts about how much of a role 5G itself will actually play in the £5bn programme because the nature of mobile in rural areas (i.e. using lower frequencies to cover a wider area) doesn’t exactly make it easy to deliver speeds of 1Gbps. You also still need to feed those masts with fibre or more limited Microwave links.

Nevertheless, if we assume that 5G will play a role then the recent decision to ban Huawei won’t help. Both Vodafone and Three UK have already called upon Ofcom to scrap their future auction and adopt a different model (they want spectrum to be allocated at a price agreed between the networks themselves – and pigs may fly), while O2 has launched a legal challenge (here). But changing the rules yet again (they already did it once for the Shared Rural Network) would also add significant delays.

We await BDUK’s final framework and Ofcom’s future 5G auction with great interest.

Leave a Comment
29 Responses
  1. Avatar - says:

    This is basically because they have decided not to just give the cash to BT. Outrageous position.

    1. Mark Jackson Mark Jackson says:

      Not outrageous if you’re a big commercial operator like BT, obviously. I suspect they know that if the Government wants to hit their targets then they’ll have to bank a fair chunk of that investment on a big player and not merely rely on smaller altnets, which are spread sporadically across different parts of the UK and attract higher risk (politicians are risk averse).

      As we saw with Gigaclear, nudging smaller players to scale-up their delivery in a short space of time can create problems with management, planning and resources.

    2. Avatar GNewton says:

      Giving taxpayer’s cash to any telecom, including BT, always has been problematic, especially when the cash-giver (government) doesn’t get an ownership share in the telecom company. Once the publicly funded network is built, it shouldn’t be wholly owned by the telecom recipient.

      We don’t want telecoms acting as beggar for public money when they don’t have a need for it, as was the case with some past BDUK projects.

  2. Avatar Buggerlugz says:

    I don’t think Clive should be worried that the governments rollout is to “ensure that “every home” can access gigabit-capable broadband”, I think he should be more concerned how he’s going to sell it affordably to customers, because at present gigabit pricing (like anything 100Mbps and up) is a joke.

    1. Avatar Steve says:

      I’m not sure that matters so much. This is about providing infrastructure that’s capable of it moving forwards, rather than service availability ‘today’.

    2. Avatar New_Londoner says:

      @Steve
      The problem is that it needs to generate incremental revenue as, without that, it’s hard to justify the investment. Spending £bns simply to keep revenue flat is unlikely to please investors in any market!

    3. Avatar Buggerlugz says:

      You’d think no-one buying gigabit because its so expensive would be good reason not to chuck any investment at it at all.

    4. Avatar CarlT says:

      Clive can’t force Sky/TalkTalk/Vodafone to sell the higher tier products. BT Wholesale can’t undercut those guys else they’ll be strung up by the regulator.

      80/76 Mbit didn’t sell that well initially – people didn’t see the need. Same story for gigabit.

      Unless you, someone using mobile broadband, can think of some application needing 900/115 right now of course?

      They are known as vanity tiers for a reason.

    5. Avatar Sandra says:

      But you get what you pay for. I’ve never hidden the fact on here that I have 1Gbps via Giganet and I pay just shy of £590 a month for it – but I get my own lease line, I get 2 hour fix time. I get 24/7 support via video/text or phone.

      I also get a QoS that I need..

      100mbps/100mbps is £240 a month – what that’s expensive?

    6. Avatar A_Builder says:

      @CarlT

      “80/76 Mbit didn’t sell that well initially“

      I’m told by a reliable source at Utility Warehouse (OK don’t all laugh at once) that there is a backlog processing speed upgrade requests. And I’ve heard similar from other ISP’s.

      Even if the packages Initially sold are income flat – which I don’t think will be the case for long – then the saving to BT are the lower maintenance and lower power consumption of FTTP.

      It will be really interesting seeing if any of the majors will tell us what the package splits are on FTTP.

      Good to see BT/OR wanting to maintain build momentum.

    7. Avatar CarlT says:

      Can believe it A_Builder – I used initially for a reason 🙂

      Sandra – was pretty sure I knew who you were by the content and manner of presenting it – has remained consistent for over a decade. Thanks for removing any doubt.

    8. Avatar Sandra says:

      Well yes I am quite high on social media but i’ve only been doing it for 4 years, But if you have any problems please direct them to my Husband James Ecton, thanks!

    9. Avatar joe says:

      “I’m told by a reliable source at Utility Warehouse (OK don’t all laugh at once) that there is a backlog processing speed upgrade requests.”

      I’ve heard the same at various times…

  3. Avatar Meadmodj says:

    No formal consultation has been issued so these are initial views and I am sure Ofcom will get many from the various players. The £5bn will not go far and affects only around 11% of premises. OR and the Altnets do not need to go anywhere near these unless its in their interests to do so. Only OR has a long term objective to upgrade and eventually remove copper.

    This is related to wholesale access to networks and Ofcom may need to ensure ISP competition.

    OR could for instance focus on the more profitable areas for the next few years within their current investment plans and resources. In addition for rural they could adopt a different design model with higher ratios concentrating on a cheaper Ultrafast (say 200Mbs) and still achieve eventual copper closure. They know that going forward they will have reduced percentage of broadband coverage and if areas are “given” to Altnets with public money these areas would not be worth front loading investment.

    Whether its OR or Altnet the forward plan needs to promote FTTP, network competition and universal availability of Giga capability.

    ORs current Fibre First is based on contigous areas, scale, recovery of copper/costs and centralised nodes. Alnets will have similar issues related to their core networks.

    If Ofcom make allocation too complicated it could make things worse and there will not be enough time. I think OR are just getting that commen sense point across.

  4. Avatar Nick Roberts says:

    Can’t believe how institutionalised BT’s thinking is. “It takes two years to train a line-man” etc, etc. Sounds like a right load of cosyville/resistance to change carp.Too busy taking in the profits to worry about rural. Hardly, the innovative, risk-averse, dynamism that we’re told that Brexit will require. Euh ? All these remote locations have an electricity supply. Pro-temp, piggy-back the high-speed service on that.At the destination, cabinet it off the leccy cable to fibre for the last 100 yards. Then, if necessary, fibre the “Gap” at leisure. Even, if the full throughput rate may not be achieved initially, it will be sufficient to give rural businesses half a chance of a viable internet presence. OK rural internet may be the finance equivalent of sub-prime mortgages, but even they have been re-financed long-term

    1. Avatar Jack Court says:

      Amazing. Do you want to call it CTTF or LSDV?

      We definitely need broadband on aluminium bearer.

    2. Avatar 125us says:

      What the devil are you talking about?

    3. Avatar Mince says:

      Hi nick. Can confirm the 2 year training. Can confirm I’ve been working with fiber for 5 + years and still everyday something new is learned . Can confirm your talk of somehow utilizing the leccy network to provide service proves you don’t have a clue what your on about. There’s these things called regulation, safety , and way leaves. Trouble is , when it comes to broadband , every man and his dog , who have absolute no experience in the industry whatsoever , think they are experts.

    4. Avatar Fastman says:

      another day – another person whos nothing about complex of building a workforce that capable of dealing with the future stack and how to deploy and build a fibre network —

      some people are beyond belief on this forum

  5. Avatar Rahul says:

    You can’t take Boris Johnson seriously. He initially talked about Full Fibre by 2025 when he knows full well that the UK cannot achieve that target even if you spent billions because of other bureaucratic elements, such as red tape, wayleave, etc, which will get in the way of achieving this target.

    Boris also spoke with so much accent for Coronavirus about maintaining social distancing, washing hands regularly and yet he got infected and almost died of it!

    He then started talking about Obesity, something he can’t take control of himself. I’d like to see him at least reduce his obesity to the overweight category and maintain it.

    Different subject matters are used by politicians to divert the topic one from another. This is a typical strategy used by politicians so you can forget about every single thing they try to promise and can’t accomplish!

    Of-course the majority of the people in this country by 2025 will forget about the Full Fibre 2025 pledge. Only a niche of readers here on ISPreview and ThinkBroadband will remember and be reminded that the mission has not been successful.

    But Boris knows majority of the UK population don’t even know of sites like this that cover such stories and it is unlikely that TV News channels will cover it either.
    His main mission of priority was to win the general election by making a few bold promises like Brexit. 2025 is far away from now and perhaps he won’t even care if he is PM for the next election.

    1. Avatar Fastman says:

      rahul

      its about gaining momentum — if you dont seat a target top get the government machine to move (you dont get anywhere you have to ramp it up) – if you set a target you might not get to it but you will get a lot further than from the position you started from – – does that sound like something else recently that been in the news

  6. Avatar Scott says:

    OR is a behemoth of a company that lacks the agility and flexibility to monopolise this rollout. 90 working days (18 weeks!) minimum from order to install is ridiculous. A friend of mine had 2 OR engineers at his house all day to run a new wire from the telegraph pole to the house as an example. This should be spread out to as many altnet suppliers as possible.

    1. Avatar Fastman says:

      90 working day – so that either an ethernet cct or a fibre on demand order both of which are bespoke network service

      which one then ?

      there would have been 2 men re the pole and the specific for any number of reasons (none of which you would probably be aware of why

  7. Avatar Gary says:

    Sadly he’s right IMHO, doesnt take a rocket scientist to predict that a sizable government funded project that has to be ‘fair’ to all bidders is going to be a shambles.

    I just wonder how much time and money this approach is going to waste.

  8. Avatar liveswired says:

    All this talk about Gigabit when most of us with Three can barely get a Megabit.

    1. Avatar Yatta! says:

      If you’re having problems, vote with your feet and switch network.

  9. Avatar Oscar says:

    I can’t think of anyone who would waste it more efficiently than Openreach…

    I can’t believe they thought Gigabit over String (GFast) was a viable plan.

    Just give in, lay FTTH, lay it everywhere, no matter the cost, and do it now.

  10. Avatar Yatta! says:

    This entire administration is a car-crash.

  11. Avatar Chris C says:

    There seems to be a big flaw in all this.

    The government seem to be acting on the “false” idea, that every city is covered by commercial rollouts.

    Will there be government intervention for cities with no FTTP?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Hyperoptic £22.00
    Avg. Speed 50Mbps, Unlimited
    Gift: None
  • Onestream £22.49 (*29.99)
    Avg. Speed 45Mbps, Unlimited
    Gift: None
  • xln telecom £22.74 (*47.94)
    Avg. Speed 66Mbps, Unlimited
    Gift: None
  • Plusnet £22.99 (*35.98)
    Avg. Speed 36Mbps, Unlimited
    Gift: £50 Reward Card
  • Vodafone £23.00
    Avg. Speed 35Mbps, Unlimited
    Gift: None
Prices inc. Line Rental | View All
The Top 20 Category Tags
  1. BT (2769)
  2. FTTP (2756)
  3. FTTC (1785)
  4. Building Digital UK (1743)
  5. Politics (1667)
  6. Openreach (1622)
  7. Business (1434)
  8. FTTH (1340)
  9. Statistics (1241)
  10. Mobile Broadband (1227)
  11. Fibre Optic (1064)
  12. 4G (1057)
  13. Wireless Internet (1021)
  14. Ofcom Regulation (1015)
  15. Virgin Media (1006)
  16. EE (697)
  17. Vodafone (669)
  18. Sky Broadband (668)
  19. TalkTalk (663)
  20. 5G (517)
Promotion
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact