Playing Catch-Up: The UK’s Full Fibre Challenge

Written By Guest User

Several companies have burst onto the scene in recent years to challenge incumbent cable networks, looking to accelerate Britain’s broadband upgrade. The market opportunity is clear to see, as the FTTH Council Europe ranked the UK third from the bottom in the countries with the strongest subscriber penetration of “full fibre” (FTTP/H/B) based ultrafast broadband ISP networks in 2021 [1]. However, competitors seeking to service the current gaps in the market will face two key challenges as network saturation occurs in urban areas:

  1. Overbuilding through duplicative fibre rollouts in competitive urban areas is inefficiently consuming deployment resources and increasing the difficulty for operators to gain a return on their investment

  2. As networks look to serve rural premises, distances increase, driving up the cost of deployment and squeezing margins

The Government, however, remains committed to providing gigabit-broadband to 85% of premises by 2025 with the Levelling Up White Paper published in February 2022 setting a new target: for gigabit-broadband to be available to “at least 99%” of premises nationwide by 2030 [2].

So Why Has the UK Fallen so Far Behind the Rest of Europe?

Latvia is in the lead, closely followed by Lithuania, with 92% of homes having access to full fibre. Fast instalment in these countries has been enabled by heavy investment and prioritisation of public wifi, giving the likes of South Korea and Singapore a run for their money since 2011 [3]. But for one of the larger countries, Spain, the progression of roll-out is owed to a large number of above-ground connections, the ability to use pre-existing physical infrastructure such as ducts, poles and manholes, as well as relatively low labour costs.

Top and bottom five countries in homes passed as % of households in 2020 (Source: FTTH Council Europe)

We find the UK bringing up the rear with only 15% of homes connected to full-fibre broadband networks towards the end of 2020. However, according to Ofcom, some 24% of UK homes and businesses had access to a “full fibre” network in May 2021, up from 14% in May 2020 and representing coverage of c.7 million premises passed. Unlike the other countries in the bottom portion, the UK is rolling out full fibre more slowly due to the earlier success of installing a hybrid fibre. By combining older copper, aluminium or coaxial lines with the latest ultrafast fibre optic cables the UK were able to benefit from a faster network without installing full fibre. However, the race is now on as consumers demand the next step in connection speeds and network providers compete to deliver full fibre nationwide, including hard to reach rural areas.

Importance of a Full Fibre Network

Although the UK has implemented a short-term fix, the importance of upgrading to a full-fibre network has not changed. Moving into the world of smart homes and the internet of things, fibre speed will become increasingly important.

In the short term, businesses and individuals alike will benefit from the increased efficiency of cloud-based software and services. Demand for higher-quality streaming, smoother video calls and faster download times is likely to continue as we increasingly immerse ourselves in digital experiences.

An example of how full fibre connections can transform the digital capabilities of UK businesses is through the digitisation of physical networks in logistics and supply chain management. Where logistics has traditionally been composed of warehouses and vehicles, companies like DHL are prioritising the digitisation of these networks, investing in stock management and warehouse robotics [5]. Smart networks require seamless integration between databases and logistics nodes, which is dependent on a connection that can cope with transferring large amounts of data in a short period of time at the core. Accelerating the digitisation of our physical networks can potentially lower barriers to entry for new companies to participate in the movement of goods, enabling commerce expansion across regions and borders.

Solutions: Optimising FTTP Deployment

Increased coordination in deployment

Service providers able to secure agreements with Openreach to access the Physical Infrastructure Access (PIA) product can reduce the cost to deploy their own full fibre networks via existing cable ducts and poles. However, PIA cannot be used everywhere, and rivals will often still have to dig and install new infrastructure. Only by working together through strategic partnerships can operators and regulators minimise overbuild and maximise the reach of full fibre networks. In a highly competitive market this proposition may seem fanciful but current market dynamics point towards an eventual shakeout and consolidation, it is only by minimising the duplication of networks through collaboration that demand can be met optimally from town to town and city to city.

Access to skilled labour

Five years ago, around 10 operators built out fibre networks, today over 50 operators are building. Current market conditions suggest that the national availability of deployment personnel is unlikely to increase at the rate required. With strong competition for experienced employees likely continue, operators and sub-contractors can turn their focus to recruiting and hiring people from outside the industry in order to train new engineers.

Innovation in deployment

Initiatives that offer the possibility of a dramatic reduction in civil works are particularly attractive, with digging costs constituting the vast majority of the expenditure required to build new gigabit-capable broadband networks. An exciting, new technology opportunity is the Fibre in Water (FiW) competition whereby broadband cables could be fed through Britain’s water pipes [6]. However, operational efficiencies must also be achieved more incrementally through increased digitisation of all aspects of the design, construction and operation of fibre networks. An example of this is seen through geospatial software provider, IQGeo, managing design and maintenance data that is captured to provide a real-time view of the state of fibre network assets accessible for all teams to see using tablets and mobile phones [7].

To meaningfully optimise the deployment of full fibre networks for efficiency and ensure sufficient return on investment for operators, key players must keep working together with governments and regulators. However, companies with superior internal processes can lower deployment costs as a result of incremental process improvements embedded within the organisation [8], supported by continual upskilling and innovation.

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