Ultrafast UK: invest, scale and deliver

Full fibre continues to make headway in the UK. Openreach has upped its FTTP target from three million to four million in the next couple of years; KCOM has completed its full fibre rollout across Hull and East Yorkshire and has passed the 100,000 customer mark; and the country’s independent network operators continue to ramp up their coverage.

Meanwhile Virgin Media has begun its Docsis 3.1 network upgrade with Southampton the first city to see deployment. But FTTP is also gaining a foothold in the cable operator’s network, with 86 per cent of Project Lightning’s infill build comprising full fibre in Q1 2019.

Estimating the independent network operator footprint

We recently produced a mini update to our May 2019 report Metrics for the UK independent network sector. It has been produced in partnership between INCA – the Independent Networks Cooperative Association – and Point Topic, drawing on input from both INCA members and non-members.

The UK’s independent network operators are estimated to have addressed over 1.31 million homes and businesses with fixed superfast or ultrafast broadband networks by September 2019. Figure 1 shows this coverage. It is worth noting that operators’ reporting varies in terms of what constitutes ‘passed’ and ‘addressed’, and that the majority of this coverage uses ultrafast fibre-to-the-premises or home (FTTP/H) and fibre-to-the-building (FTTB) technology. In terms of live connections we estimate 327,700 lines to superfast and ultrafast fixed networks provided by independent operators at the end of September 2019.

Figure 1: UK independent network operator footprint, September 2019

CityFibre has announced its second phase of deployment to expand its Gigabit City programme by a further million homes in 14 towns and cities. This now totals over two million homes planned across 26 towns and cities.

Investment continues to flow into the sector. KCOM (although not technically an indynet) has been bought by MEIF 6 Fibre Limited, a wholly-owned indirect subsidiary of Macquarie European Infrastructure Fund; a majority stake in Hyperoptic is now owned by investment firm KKR; Community Fibre has secured an additional £50 million in funding from its two institutional investors; and B4RN successfully crowdfunded more than 100 per cent of its £3 million bond offer.

Target customer bases are being honed. Hyperoptic and Community Fibre are mopping up the London social housing sector obtaining wayleave agreements with local authorities. And competition is hotting up in the new build homes market with day-one connections being pushed heavily by Hyperoptic; Openreach courting developers in Scotland and Wales; and British Fibre Networks claiming 24,000 new homes have been signed up to its FTTP connectivity. Meanwhile Sky has announced a new wholesale access agreement with the Brookfield Utilities UK Group which owns both new build specialists, GTC and Open Fibre Networks Ltd (OFNL).

Coping with growth through technical innovation

Scaling up fibre deployment and bringing down costs is now key for all players large and small. Already we have seen some fallout in terms of ability to cope, for example Gigaclear’s Connecting Devon and Somerset (CDS) contracts which were cancelled in September 2019 after delays and an acceptable recovery plan failing to be delivered. But time and cost saving approaches are being rolled out by many including Openreach with civils techniques such as its Georipper and Orion mobile planning tool. New technology combinations are also being tested including Virgin Media’s use of radio technology for backhaul to rural areas and Airband’s hybrid Rural Optic solution.

Agreements to secure components are mounting. CityFibre’s recent deals with Cubis Systems and Prysmian Group, and Zzoomm’s partnership with Hexatronic and Adtran are examples of players moving to ensure they have the means to deploy at pace over the coming years. Access to labour may also be an issue. Openreach’s training centres are aimed at ensuring a labour pool with the right skills. Meanwhile Zzoomm is to set up local recruitment in Henley-on-Thames to ensure it has direct employees for deployment.

There is also a drive to recruit expertise to pivotal positions with Hyperoptic, CityFibre, British Fibre Networks, ITS Technology Group and others all announcing new appointments. Meanwhile although a rather different approach in terms of its focus on community volunteers, Hyperoptic’s first Digital Skills Academy for local people in Southwark, is also part of this focus on ensuring access to skills and people, this time in terms of encouraging service take up.

Automation of systems and processes will be increasingly important for all operators, and it is noticeable that providers Community Fibre and B4RN have announced new analytics and CRM systems respectively. It is also no surprise that newer players are building in such systems from the start. Full Fibre Ltd has focused its business operations on automation in order to keep costs to a minimum.

Technology jumps are on the cards with several players announcing 10Gbps services following various equipment trials, including those run by TrueSpeed and Zzoomm. There is also evidence some independent networks are gearing up for activity in the smart city and smart home arena, in addition to broadband service delivery. CityFibre’s trial using sensors for health and environmental applications with care provider Cross Keys Homes, and PCCW Global’s involvement in smart security and energy management within buildings, provide some insight into what is to come.

Access to our Ultrafast UK: invest, scale, deliver report as well as our mini update on Metrics for the UK independent network sector is available via our UK Plus subscription service. To find out more, please telephone +44 (0)20 3301 3303 or e-mail [email protected].