Telco bosses tell UK government to 'get on with it' on fibre

Big names in the UK telecoms industry urged the government to push on with plans to allocate funding for rural high-speed broadband rollout, despite questionable demand.

“Get in with it,” urged Openreach CEO Clive Selley, at the Connected Britain online event this week. He was referring to the government’s commitment, unveiled earlier this year, to providing £5 billion in funding for the deployment of Gigabit-capable broadband in hard-to-reach areas. The state needs to make some decisions on how the funding will be allocated and put it out to tender, Selley noted.

“Lay out the scheme really quickly because every week that goes by we’re a week closer to 2025,” he said. “Everyone will play if the conditions are right,” he added. “Work with us, but go fast. 2025 is coming.”

Earlier this week Digital Infrastructure Minister Matt Warman waxed lyrical about the planned £5 billion investment, but clammed up when pressed for further details, insisting the government is “working on it.” He shared only that there will be contracts of varying sizes; “It will be a flexible system,” he said.

Prime Minister Boris Johnson famously pledged to roll out full fibre nationwide in the UK by 2025 when campaigning for his party’s leadership last year, but since taking office has somewhat diluted that plan and now targets Gigabit-capable broadband nationwide, which could be delivered using cable or wireless, as well as fibre.

That approach is not finding favour with everyone. The government is “watering down an ambition,” insisted CityFibre CEO Greg Mesch, who, unsurprisingly, believes full fibre is the only way to build a world-class infrastructure in the UK.

But the burning question is whether or not customers really want or need fibre-to-the-premises. Demand for reliable high-speed connectivity intensified as a result of the Covid-19 lockdown period earlier this year, but take-up is still not stellar.

“We’re cracking on with the build,” Selley said, adding that by the end of the current quarter Openreach will have passed 3.5 million homes with full fibre and has 650,000 live connections. “Since the unlock on Covid…orders have accelerated really significantly,” with retail ISPs working hard on sales and marketing initiatives for fibre broadband.

Indeed, TalkTalk chief executive Tristia Harrison urged the wider industry to “focus on migration incentives,” noting that for full fibre to truly take off it needs to be affordable for consumers, while similarly retailers require affordable wholesale agreements.

“Are consumers prepared to pay a little bit more for fibre? I would say, yes, they are,” she said. “It’s not going to be a huge premium though.”

The government, regulators and the sector itself need to think about the likely forthcoming economic contraction, because the concepts of levelling up the market and extending full fibre to uneconomic areas, “could be at odds with each other,” she warned. Fibre needs to be affordable for the vast majority of people, “and I think there’s more government can do on that.”

Fibre uptake is not just about affordability though, there remains another hurdle around awareness. The Covid-19 pandemic is encouraging people to think about ordering high-speed connections, but “we need to eliminate the false advertising of fibre,” said CityFibre’s Mesch. “Consumers are coming out in the streets and telling us, as we build, ‘don’t dig up my street because I already have fibre.'”

Ofcom and the government need to look at changing the Advertising Standards Authority’s stance on how fibre broadband services are marketed, Mesch insisted. Last year CityFibre lost a bid to prevent retail ISPs from using the term ‘fibre’ to describe fibre-to-the-cabinet services, where the last mile is old school copper; the ASA ruled that such advertising would not mislead consumers. Clearly CityFibre did not – and still does not – agree.

“[This is] damaging everyone’s business case for fibre,” Mesch said.

But maybe most consumers really don’t need anything faster than FTTC. Data usage on the CityFibre network hiked by almost 50% virtually overnight in March, as a result of lockdown, and still the network was at just 2% capacity, Mesch said. “We didn’t even blink, during Covid…there was no stress whatsoever on the network.”

While that clearly demonstrates, as Mesch intended, that CityFibre is deploying robust, high-speed infrastructure, it also suggests that consumers just do not need this capacity…yet. Of course, CityFibre is building what Mesch describes as “a platform for the next generation, for the next 100 years,” but maybe now ‘Gigabit-capable’ is more than satisfactory for most people. Provided the government gets a shift on and allocates that £5 billion in funding.