BT is considering rolling out fibre to the node, but the UK carrier admits that the "economics have to be right" before it will consider investing in a new fibre network.
Ian Livingston, head of BT’s retail division, told the Financial Times newspaper that the carrier would discuss investing in an ultra-fast network with the government and regulators at a summit in November or December.
This follows concerns, expressed last week by Stephen Timms, minister for competitiveness, that the UK risks falling behind its European neighbours on broadband speeds. France and Germany are currently investing in new fibre optical networks that should deliver broadband speeds of 50 to 100 Mbit/s.
In the UK meanwhile, households are lucky to receive the 8Mbit/s standard, although BT hopes to increase broadband speeds up to 24Mbit/s from April next year when it starts to roll out ADSL2+, as part of its triple-play strategy (voice, data and video services over a single broadband connection).
And it is not clear at this stage whether a new network would be “fibre to the node” (where BT would use fibre to replace the copper line from a BT telephone exchange to the green street cabinets found on most UK streets), or "fibre to the home" (where BT would run fibre all the way from the exchange to the home).
This is now the second time that BT has publicly suggested replacing the largely copper-based network with fibre, but the UK carrier will have a tough time justifying the outlay to its investors.
“The economics have to right, and they are not right at the moment,” admitted a BT spokesman. He pointed out that even Stephen Timms made it clear that the current regulatory environment is not in place to allow BT to invest in a fibre network.
“We are talking about both fibre to the node, and fibre to home,” the spokesman said. “But fibre to the home will be more expensive, and those costs will have to be factored in too.”
“We don’t have a figure yet,” said BT, although the FT suggested that the new network could cost more than £10bn to build. The BT spokesman on the other hand estimated costs were liable to be the low £10bn and upwards region.
“If Ofcom can find a way to ensure we get a decent return on a significant investment, we will happy to talk about it. That is the key element,” said BT.
BT confirmed that a new fibre network would be open to wholesale, unlike its European rival Deutsche Telekom, which caused huge controversy last year when it reached an agreement with the German government and German regulators to effectively “lock out” competitor access to the new fibre network for a three year period.
“We don’t think that the DT example is the way to go,” said BT.
BT will be installing fibre in new builds from next year. “It makes sense (to use fibre in place of copper), as there will be plenty of house building in the next few years,” the UK carrier said.
“We are at very early stage at working out what is feasible,” regarding a fibre optic network, said BT. Yet it is clear that until the UK government and Ofcom can reach agreement with BT regarding a new fibre network, and whether the terms would be acceptable to both BT shareholders and its competitors, the new fibre network remains some years distant.
Ofcom told Techworld they are publishing a formal consultant document later this week regarding a new fibre network and cannot make any comment at this time.