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The changing role of broadband

The UK regulator Ofcom published its review of the telecoms industry recently, looking at how to ensure homes and businesses get the best possible broadband services. Ofcom’s report has called for Openreach (the BT division that owns the broadband infrastructure) to become a wholly owned subsidiary with an independent board that controls budget and strategy. Ofcom rightly said that BT must open up its network infrastructure so that its competitors are able to lay their own fibre optic lines, following criticism that BT was failing to invest enough in upgrades.

The enterprise that is tasked with modernising the UK’s broadband network will soon find a range of issues affecting service rollout. This is not just in the well-publicised rural areas but also inner cities.

The current state of play: FTTC

BT Openreach’s broadband network is currently built on a backbone of green cabinets, which can be found at the end of most streets in towns and cities throughout the country. They play a critical role in taking fibre optic from the telephone exchange to the green cabinet, then use existing copper telephone lines to get the last hop to the home. For many, the speeds delivered by Fibre To The Cabinet (FTTC) will be sufficient, but there are limits.

Being connected to a fibre-enabled cabinet does not guarantee that fast speeds are delivered; if the home is located some distance from the cabinet the speed increase may not be huge. Secondly, there is a limit as to how many lines can be accommodated by each green cabinet – once full, customers will need to wait for further cabinets to be installed or the existing one upgraded before they can place an order. In some areas getting planning permission and electricity for this expansion can result in substantial delays. Thirdly, as more homes are connected to their local green cabinet, speeds can drop. This is because of interference (cross-talk) between the lines. New innovations such as G.INP are being deployed to help reduce its impact.

Is FTTH the solution?

Some of BT’s critics argue that FTTC isn’t good enough and that Fibre To the Home (FTTH) is required for a truly leading edge broadband network. This requires streets and gardens to be dug up to swap the old telephone line out for a fibre optic connection. We agree with the ambition, but at an estimated cost of £20-30bn, the business case is difficult to make unless broadband costs rise. This could include charging premiums to customers in poorly connected rural and urban areas, or increasing the overall costs for broadband access so that all customers subsidise those in the worst affected areas.

There is no simple solution. At approximately £1000 to install FTTH into each home, how many months of cheap broadband will it take to make a profit? Exactly. Opening up BT’s ducts to competitors doesn’t dramatically reduce the economics.

Running a broadband network requires decisions to be made based on practicality and cost. Any company given the responsibility of supporting broadband infrastructure in the UK will have to make important decisions on how it can deliver ubiquitous, reliable, and fast broadband, whilst targeting investment that can generate return.

So what's the answer?

That said, there are strategies and solutions that BT and other providers can now adopt to address the issue of poor broadband reliability and speeds. While the growth of fibre networks has been restricted, mobile broadband coverage has increased exponentially across the UK in the last couple of years. This has led to the development of a ‘hybrid access’ solutions model that combines 4G signals with fixed line broadband that is resilient enough to deliver the equivalent of fibre broadband connections to the home or place of work and maintain a broadband connection.

This model can enable a broadband network provider to deliver a consistent, high quality of service and also make a steady return on its investments, providing residential customers with reliable Internet access. Configured to enable more reliable Internet access, hybrid solutions can function even when the fixed network fails by automatically switching over to the mobile broadband connection. The implications of hybrid solutions being used in a market where so called ‘quad play’ offerings from service providers may leave select subscribers without the quality of Internet connection they require.

Although we all use the Internet, each of us has different needs and expectations of its performance. For every happy daily user, there are also those subscribers who are left feeling the quality of experience on offer from their provider is insufficient for their online needs. This need not be the case when there are hybrid solutions that can adequately support the intense data needs of many subscribers and the quad play bundles that are fast becoming attractive to consumers.

Paul Evans, CEO at Boosty

Image source: Shutterstock/asharkyu

Paul Evans
Paul Evans is the co founder and CEO of Redstor and is responsible for setting the strategic direction of the business and investigating and developing new business opportunities for Redstor.