British countryside sees growing number of fibre projects

Tuesday 8 November 2011 | 15:54 CET | Background

CityFibre has hired Macquarie Capital to raise GBP 500 million for investing in fibre networks in the UK. CityFibre, one of the speakers at our recent Breedband 2011 conference, wants to connect 1 million households and 50,000 business sites with the new funding. The company already has all the necessary fibre assets, such as long-haul, metro rings and FTTP, in Bournemouth.

CityFibre's strategy includes the following:

  • The company targets tier 2 and tier 3 cities (tier 1: London, Birmingham, Manchester, Liverpool etc.).
  • One can assume that CityFibre will also turn to government funding for broadband expansion (BDUK: Broadband Development UK). These subsidies can add to the money raised to realise the company's goals.
  • It's working exclusively on the passive layer, and as such will look to work with independent ISPs which can offer services on the network. 
  • The bandwidth delivered should reach 1Gbps (symmetric). 

Activity on the British fibre market is picking up. While BT with FTTP and FTTC and Virgin Media with HFC and FTTP aim to cover around two-thirds of the population in the next few years, other parties are busy looking at ways to reach the ‘final third’. The latter are often working towards speeds of up to 1Gbps, well beyond what BT and Virgin are offering. In addition to CityFibre, other players include:

  • Fujitsu: recently started a test in Greasby. See our commentary ‘Fujitsu makes some surprising choices with UK FTTH network'.  Fujitsu is rolling out in outlying areas. 
  • Vtesse Broadband: has a network in Broughton near Cambridge.
  • Hyperoptic, a company set up by the founders of Be Broadband (acquired by Telefonica O2) recently launched services to apartment buildings in London. 
  • Gigaclear: active in the countryside and launched in Hambleton (North Yorkshire).
  • Nextgenus: launched in the village Ashby de la Launde in Lincolnshire.
  • Broadband for Rural North (B4RN, also present at our conference Breedband 2011) is a start-up looking to cover rural areas of Lancashire.
  • Telefonica O2 announced plans for a trial before the end of 2011.
  • Jersey Telecom wants to cover the entire island of Jersey, helped by the fact that all the houses are already connected to a duct system. 
  • KC of Kcom (previously Kingston Communications, the incumbent in the city Hull) is working on a fibre roll-out. 

What's notable about the above initiatives is that they extend to outlying areas and most often target the countryside. Remote areas are more expensive, per connection, to connect to fibre, but there are at least two factors that make them interesting:

  • There is little competition. Cable is often absent, BT's exchange is far away and satellite broadband offers limited broadband at a high price. That leads to a high participation and penetration rate, allowing the higher costs to be earned back. 
  • The government can provide support, especially if this comes alongside the company's own investment. 

Both advantages are being exploited by the German operator Inexio (see our article ‘Inexio successfully deploys FTTC in western Germany'). Inexio is active in areas where there is no cable and the Rheinland-Pfalz land provides subsidies for rural broadband.

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