Published:
15-Jul-08
UK incumbent telco BT has announced plans to invest £1.5bn in fibre-optic broadband infrastructure development. The company expects to pass up to 10m households by 2012 using a mix of FTTP (fibre-to-the premises) and FTTC (fibre-to-the-cabinet) technologies. FTTP will mostly be deployed in new buildings and will allow connection speed of up to 100Mbit/s (anecdotally constituting around 10 per cent of homes passed in the build out); older sites will receive FTTC and copper wires will remain in use for the last mile infrastructure thus setting achievable speed ceiling at 40Mbit/s. BT plans to sell access on both retail and wholesale levels. Telco is said to be in talks with the regulator Ofcom over adjustments to the regulatory environment which would improve BT's prospects of returns on investment. Ofcom is set to publish a proposal for regulatory regime amendments in September.
Our take...
The announcement is part of an ensuing public dialogue between the regulator and BT about the development of a next-generation broadband network. Earlier this month the regulator has urged network operators to provide higher speed connections and pledged to introduce changes to the regulatory framework to provide more incentive for costly infrastructure deployment. Current regulations require BT to provide network capacity on the same conditions to all internet service providers including its own retail arm. Screen Digest believes that BT expects its wholesale division to recoup the costs of fibre roll-out. The lift of regulation on BT wholesale pricing would allow the incumbent to secure returns on infrastructure investment, while adhering to the principle of equal access provision.
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