UK the new hot spot for broadband

The UK broadband communications market has been set alight by BT’s announced plans for a £1.5 billion programme to accelerate deployment of fibre and deliver a range of services at speeds up to 1 Gbps over the next five years.

Rapid broadband expansion for the UK

This has thrown down the gauntlet to UK regulator Ofcom, since BT has linked the programme to relaxation in the current rules compelling BT to maintain dial up lines, insisting that it be treated the same as any other operator.

Now that BT is aiming to increase speeds, the future is looking a little more rosy

Richard Broughton

Analyst

Screen Digest

Crucially BT also insisted that Ofcom should change the rules to give greater encouragement to firms that might invest in deployment, whether local or foreign.

While Ofcom may have some difficulty conceding to all BT’s demands, the clear advantages of rapid broadband expansion for the UK as a whole are so compelling that an agreeable compromise is highly likely, according to most analysts.

The key point is that the UK will be able to catch up and perhaps even overtake other European countries in speed of access.

“As far as broadband goes, the UK is already ahead of the trend in terms of penetration, but generally behind on speed,” said Richard Broughton, analyst from Screen Digest, the research firm specialising in broadband content and distribution.

“Now that BT is aiming to increase speeds, the future is looking a little more rosy” he added.

There is also symbolic significance in that this would be the UK’s first major commitment to fibre deployment, which unlike copper offers almost unlimited potential for future bandwidth increase.

“This announcement is the first large-scale fibre plan,” said Matt Yardley, Head of Broadband & Media in the consulting division of US based research group Analysys Mason.

“Prior to this BT had only said it would deploy fibre in new build areas, and those would probably only be for quite large developments (thousands of homes)” continued Yardley.

The big difference now is that the deployment will benefit a far greater proportion of the UK population, even if there will still inevitably be some bias towards more densely populated areas, said Yardley.

However BT’s Chief Executive Ian Livingston has already suggested that local councils and regional development agencies might share the cost of pushing fibre out into more rural areas.

Fibre to the Home

In fact fibre does not have to reach every home. BT’s plan is to deploy fibre to the end of each street in most cases, using VDSL technology then to deliver over the remaining copper circuits at bit rates up to 100 Mbps to the home.

This announcement is the first large-scale fibre plan

Matt Yardley

Head of Broadband & Media

Analysys Mason

The plan is that one million homes will be connected directly to fibre, which will enable them to receive the same 1 Gbps delivered via Ethernet technology to many large businesses have today.

This move to connect some homes directly was welcomed by the FTTH (Fibre to the Home) Council Europe, whose president Joeri Van Bogaert described it as a positive step towards Europe’s future.

BT’s move was driven partly by the need for its broadband network to compete with cable and satellite TV in the delivery of high definition video services, which is not possible over most of the current largely copper infrastructure.

By the time the BT deployment is finished, 3D TV services, possibly even involving holographic projection, will be emerging, demanding bit rates up to 100 Mbps, more than 10 times current broadband services.

Attracting foreign investment to the UK

This will create great investment opportunities right across the broadband distribution chain.

On the one hand BT is seeking partners to help deploy the cable itself, in return for a share of the revenues that resulting services will enjoy.

On the other hand the arrival of such high bit rate broadband will stimulate a range of new multimedia services, including on-demand 3D video and multi-playing gaming, exploiting the strengths of broadband delivery with high capacity in both directions, and the ability to support peer-to-peer applications involving multiple users.

In particular there will be scope for European companies already deploying broadband services serving regions or local communities to exploit their skills in a very fast growing UK market.

Currently certain countries, such as Spain, and new Eastern European members of the European Union, are striking ahead with broadband network and service deployment, and the UK will present companies in these regions with a great opportunity to expand and consolidate their markets.

£1.5 million is to be spent over the next five years to provide 10 million homes with “ultra fast” broadband at bit rates up to 100 Mbps and 1 million homes with FTTH at up to 1 Gbps.