Analysis: BT's fibre plans go national

gallery

Delivering on demand

A further question is whether Ofcom and BT will be able to agree an acceptable regulatory framework that will, in the words of BT chief executive Ian Livingston, “make sure that anyone who chooses to invest in fibre can earn a fair rate of return for their shareholders”.

Ofcom has already welcomed BT’s announcement, but the regulator will have to strike a balance between allowing BT a sufficient profit margin to roll out its new network and ensuring that other ISPs are not driven out of the market by fibre.

“Local loop unbundling is a big issue for Ofcom,” said Anthony Walker, chief executive of the Broadband Stakeholder Group. “There is a debate that has to happen across the industry.” Options, he suggested, might include sub-loop unbundling, where rival service providers run broadband connections from BT’s fibre cabinets, rather than from exchanges, to businesses or homes.

But in the short to mid term BT’s moves could also have another, paradoxical effect: that of increasing the broadband divide. “In the shorter term there could be more variation (in internet access). The challenge is narrowing that down,” said Walker.

The one issue that is unlikely to be a barrier, however, is demand for faster access to the Net. Consumers are already demanding higher-speed access to support entertainment services such as IPTV and content downloads, as well as Internet telephony.

VoIP, software as a service and online, high-definition conferencing are all drivers for businesses to upgrade their bandwidth too, and there is also the issue of businesses gearing up to supply a new generation of bandwidth-intensive services to consumers over fibre.

“The argument could readily be made that while we may not know today which commercially viable services require 100 mpbs, in 10 years’ time, we might question why we ever doubted the need for such speed,” said Paul Lee, telecoms director at Deloitte, the business advisory firm.

If he is right, BT’s bold move is likely to pay dividends for its customers and shareholders alike.

Email to a friend

Print this page