BT falling behind - Virgin offering 300meg by end of year

BT seems to have been a bit short sighted in my mind. While I do think FTTC was a prudent choice a while back, they've been too slow to deploy faster solutions.

I read the article about Virgin's new double speed which will put even the most basic package up to 100meg. Admittedly the uploads are very poor which would put me off.

However, I think they might have made a serious strategic error here. Yes, they have good coverage of FTTC over most of the country (albeit with government subsidy in many). But:

1) Virgin is starting to aggressively rolling out to more of the country and will take customers from BT with better speeds I think, especially people further from cabinets

2) Small niche players are destroying BT in new build apartment blocks (and new build housing estates). Where I live in E20 there is both Hyperoptic and BT FTTP. However, the developers have done a deal with Hyperoptic where you get free broadband as a sweetner. Result: I haven't seen a single BT SSID walking round yet. Despite the probably very expensive BT FTTP rollout which is now going to waste. BT can't compete with that either on a regulatory level nor do I think they can be 'on the ground' enough to actually pen these deals if they could.

3) Sky and TalkTalks FTTH in York is further pushing them. If that took off to more cities, BT is going to have to maintain a local loop that virtually noone uses and isn't competitive, pushing up their cost base and reducing profits they can reinvest.

I'm not sure how they can come back from all this. I think they'll be left to run the last 20% or so of areas which are rural and by the nature are not profitable. They won't have the very profitable suburban/urban business to cross subsidise it with, as altnets, VM and sky/talktalk like rollouts will take all of the revenue here. They will have a USO to maintain all the [censored] copper loop though.

This leads me to two thoughts: BT know all this and are planning on giving up on it all and looking at other options which are less hassle. Like reselling football or mobile networks. Spin out openreach with all its pension liabilities, regulatory headaches and USO to curl up and slowly die.

or, BT will do a u-turn on GFast and start a much more aggressive FTTH rollout. However, from the FTTH we've seen in the past it doesn't look like the last mile infrastructure is in any kind of state to be able to do that.

Thoughts?

Edited by mr_mojo (Mon 17-Aug-15 19:35:36)

I don't see BT dropping G.fast unless something happens that really,really, scares them. There would have to be a serious competitor offering to roll out FTTP across much of the country. Having said that, copper is yesterday's technology and surely it has to die in the long run.

Edited by Spud2003 (Mon 17-Aug-15 19:51:55)

Or alternatively BT carry on with the usual plan - do virtually nothing until they absolutely have to.

There are still plenty of people happy with ADSL and it seems abundantly clear that BT are more interested in content than investing in their network to match the cable company's speeds.

All around me in the local area Virgin have been building but they cannot do so here, so I would very much enjoy seeing BT deliver genuine next generation access, however I don't see the business case.

Ahh the headline speeds, as if that is all that matters.

BTO are trying to build a national network and are being assisted by BDUK funding to do so. VM, and others, can cherry pick the locations they decide to invest in. There are many locations, small villages, where VM would just never touch.

That's what I'm saying though. How is BT going to make a profit on consumer/small business broadband when very high density areas are with hyperoptic and the like, many other areas are with VM/TT/Skys own last mile? These areas cross subsidise the rural areas.

I do get your point, from a business point of view what kind of foot hold do you think Hyperoptic/Gigaclear will be able to achieve and how fast. And to your example, I would take a wild guess and say that 0.1% of the total number of homes are new builds or about to be built in the next 5 years.

So I still say, in those cherry picked areas, those headline speeds are attention grabbing.

In reply to a post by mr_mojo:

BT seems to have been a bit short sighted in my mind. While I do think FTTC was a prudent choice a while back, they've been too slow to deploy faster solutions.

Do have VM have market dominance in any of the areas within their footprint yet? Last I heard they didn't.

Anyway there's not much appetite for the kinds of speeds VM are offering. You'll notice that they keep having to force people to upgrade. Left to their own devices most of them would probably still be on a 10Mb/s or 20Mb/s service. There doesn't seem to be a huge demand for high speed broadband yet, let alone 'ultra fast' broadband.

Traffic shaping - check.
Upstream throttling - check.

BT and later Openreach have been competing with Cable and other Altcos for decades. It's actually Cable and Altcos that are scared of competing with Openreach nowadays. The most highly anti-competitive practice in Telecoms today is the Openreach lockout of new developments.

I don't think Hyperoptic et al will really get a huge marketshare, but they do cover 100k properties so far.

What I do think are bigger problems for BT are TalkTalk and Sky building their own altnet, and VM expansion.

In reply to a post by partial:

BT and later Openreach have been competing with Cable and other Altcos for decades. It's actually Cable and Altcos that are scared of competing with Openreach nowadays. The most highly anti-competitive practice in Telecoms today is the Openreach lockout of new developments.

The 'lock out' goes both ways. Whoever wins the bid and gets to build initially alongside the developer will be the only infrastructure in the ground for a while.

http://www.yorkshireeveningpost.co.uk/news/latest-ne...

I'm not sure anyone is 'scared' of competing with Openreach. There's not that much to be scared of.

Edited by deleted (Mon 17-Aug-15 22:29:26)

VM get the headline speeds, but its not the headline packages that sell.

The biggest selling FTTC package is 40/10 and the biggest selling cable package is the bottom tier.

The problem I have with VM is they seem to dive in to get the marketing gains but then the result on their network isnt pleasant, they make this mistake time and time again.

The only positive VM seem to serve is they may force BT to invest which BT hate doing.

Gfast will deploy high speed over short distance so extend the fibre further and shorten the distance from node / DP to premise -- you have n need to get FTTP as that is expensive and most of your cost is between DP and premise up your noice blocked paving , or no duct or other issue between you and the DP

In reply to a post by godsell4:

Ahh the headline speeds, as if that is all that matters.

BTO are trying to build a national network and are being assisted by BDUK funding to do so. VM, and others, can cherry pick the locations they decide to invest in. There are many locations, small villages, where VM would just never touch.

There are also cities where VM don't have any presence - not just small villages.

In reply to a post by ian72:

In reply to a post by godsell4:

Ahh the headline speeds, as if that is all that matters.

BTO are trying to build a national network and are being assisted by BDUK funding to do so. VM, and others, can cherry pick the locations they decide to invest in. There are many locations, small villages, where VM would just never touch.

There are also cities where VM don't have any presence - not just small villages.

Agreed, I live in East London and I am unable to get any form of VM product even though 3 turning's i.e. a few mins walk from us can get their fibre.
I was also told on the phone by them, that there is no chance in hell in getting any of their fibre products in the next 5 to 10 years and this was after being told for several moths that we was down to get it.

So yeah, not just small villages that cannot get VM.

Paul

In reply to a post by ian72:

In reply to a post by godsell4:

Ahh the headline speeds, as if that is all that matters.

BTO are trying to build a national network and are being assisted by BDUK funding to do so. VM, and others, can cherry pick the locations they decide to invest in. There are many locations, small villages, where VM would just never touch.

There are also cities where VM don't have any presence - not just small villages.

I used to live in a small road off a larger road in Bristol, a city with VM everywhere, except my street. Nothing I did could inspire VM to be in any way interested in deploying to it.

I now live in a small town in suffolk, not far from other VM towns, and will probably never see it.

I've currently got 2 FTTC lines to try to match the 80mbit I had in bristol

I live in a city of over 20,000 people and there is no VM whatsoever - nearest is 10 miles away.

It's the same here in SW9. VM cable runs alongside this development of 75 properties but they aren't prepared to even connect the 21 properties that front the road with the cable even though the distance from the cable to the front wall of the properties is 2-3m, 1m at most of tarmac pavement and 2m of flower bed.

PS And as you know, no FTTC here either.

Edited by deleted (Tue 18-Aug-15 15:39:05)

Maybe the cable is already full? They have finite capacity and to add the properties may require running a new cable?

Maybe the cable is already full?

Unlikely I feel given the number of adjacent properties that, from the dangling & disconnected cables, no longer subscribe to VM. So cable full I feel is unlikely (not sure how a co-ax cable becomes full) but oversubscribed and slow, quite possibly. Most have I think gone instead for FTTC. Oh to have the option of just one let alone a choice.

By full I was meaning over subscribed - essentially it means the same thing in the case.

sorry do no agree with the assessment.

There are physical distance challenges to tackle across the whole country, which BT are looking to do with FTTC to their existing PCP cabinets. Where they have exchange only lines, they are introducing new cabinets outside the exchanges, as they are not allowed to install the FTTC HW inside the exchange. The next technology could be g.fast or something else. What ever it is, it will require more cabinets closer to the house.

my personal view is that we should:

1) mandate FTTC to all houses as a universal offering
2) mandate FTTP to all houses as a universal offering

Both of which would need some form of government legislation, your support and government funding. Remember BT, Virgin, Sky are commercial companies and do not need to actually do anything. They are all looking at terrestrial cabling (wires/fibre in the ground) to supply service to the public. How they actually do this for the next 2-3 years is based on their current service & business model.....

In reply to a post by iand:

my personal view is that we should:

1) mandate FTTC to all houses as a universal offering

With some kind of minimum sync speed specification such as 10 or 15Mb?

Where they have exchange only lines, they are introducing new cabinets outside the exchanges

Not strictly true. In our case, 75+ EO lines approx. 2Km from the exchange, BT are installing an A-I-O cabinet adjacent to the development, there being small benefit in having an FTTC cab 2km away.

even better for you

If there was a mandate then we should be looking at some form of speed, lets say 40M. Something that will last 5-10years.

It is always a struggle as in principle we should be looking at some form of fibre to each house, but that looks not to be workable for now. In 10 years possibly, but not now.

In reply to a post by iand:

even better for you

Indeed, however being a community gap funded network rearrangement the close siting of the cab to the development was one of our conditions.

Out of interest what kind of setup do you have to combine the two fttc lines?