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Big UK Telcos Gaining Superfast Broadband Competition from Alternative ISPs

Posted: 14th Nov, 2011 By: MarkJ
uk mappoint topic ukPoint Topic, a telecoms analyst firm, has today said that it is "encouraged" by the ever growing number of alternative UK fibre-based network operators and ISPs. At present BT and Virgin Media still dominate the rollout of new superfast broadband services around the country, yet a raft of smaller providers are also helping to bring "new money into the business"; often without government funding.

The analyst claims to be tracking this progress through its bi-annually survey and has identified about 100 different superfast projects. These range from helping single villages to deploying related services across whole regions, many of which we've reported on before.

The firm claims that BT and Virgin Media are leading 20 of the 100 projects, many of which are very large in scale (e.g. Cornwall). However the remainder are split about evenly between the public and the private sectors.

Annelise Berendt, Senior Analyst at Point Topic, explains:

"Our regular survey of alternative superfast infrastructure projects shows a second wave of players with new money entering the market. While BT’s plan to increase the pace of its next-generation network rollout, Virgin Media’s 100Mbps network upgrade and Fujitsu’s challenge for government money are well known, they are joined by several smaller players who have persuaded financiers to put up cash. These include CityFibre, Gigaclear [ Rutland Telecom ], Call Flow Solutions and Hypnotic [ISPr Editor: They mean Hyperoptic].

Meanwhile, Kingston Communications, the incumbent in Hull, has begun upgrading areas of its network for fibre-based services, launching a trial in September 2011. And there are other names getting involved through the BDUK framework such as Network Rail, Balfour Beatty and Thales in addition to BT and Fujitsu.

With the BDUK funding allocation process now well underway, and new sources of private sector investment coming forward, this all looks promising for superfast broadband Britain. But on the other hand from past experience, we know it takes a long time for investment, plans and network rollouts to turn into real customers."

Sadly it won't all be plain sailing. Earlier this year the governments Broadband Delivery UK (BDUK) office put out a tender worth between £750m and £2bn +vat for a new national framework agreement (here) to help achieve its target (90% of "people in each local authority area" to have superfast broadband by 2015), yet this tender appeared to impose rules that would make it difficult for smaller operators to gain a slice of the budget.

Point Topic claims that smaller providers also bring challenges in terms of network integration and the ability to build the scale required to attract big name ISPs. The hugely expensive Digital Region project in South Yorkshire, which could now be sold off to the private sector (here), is just one example of how tough the market can be.

Business ISP Fluidata believes that one solution to this issue could be its aggregated wholesale network initiative, which claims to give consumers more choice of ISP regardless of whether or not they live in an isolated rural area (here). However Berendt believes that issues like this are nothing new and "will no doubt continue to run".
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