Openreach pegs full fibre overhaul anywhere between £3bn and £6bn
And it'll cost consumers an extra £7 per head a month
Openreach has estimated it will need to fork out between £3bn and £6bn to invest in 10 million fibre-to-the-premise connections in the UK by 2025, according to a leaked copy of its FTTP consultation seen by The Register.
The broadband division of BT, which legally separated from the former state monopoly earlier this year, put its consultation out privately to its 580 internet service providers last month, which will close in September.
In it, Openreach proposes communication providers commit to moving "the entire Openreach customer base" to fibre in the areas identified, which would mean customers paying an additional £7 per month.
Opting for a "cutover" model would cost less than building the network out in a piecemeal fashion. If deployment and connection costs were recovered only from customers choosing to take up fibre, consumers would have to pay an £25 extra per head, it said.
Openreach's current rental charge for the delivery of superfast broadband and a copper line ranges between £14-£17 per month, said the document.
BT has been accused of dragging its feet on fibre investment, instead "sweating" its copper assets. It previously estimated a full national fibre roll-out would cost £28bn.
Both the government and regulator Ofcom have been keen to push for greater fibre investment, with current FTTP penetration lagging behind many other countries at just 2 per cent.
Chief exec Clive Selley has said that by using new techniques the company has recently halved the cost of delivering "full-fibre" infrastructure. He said Openreach could reach a more "ambitious" target than the 2 million fibre connections it has already committed to by 2020.
"But building a large-scale network is still a huge commercial, technical and logistical challenge that's going to need real ingenuity, flexibility and coordination across government and industry," he added.
However, some of BT's network competitors were not convinced by the approach. Mark Collins, director of strategy at CityFibre, said: "Even if they migrate everybody across, they will need to increase the price by 50 per cent. And they are saying if they don't do forced migration, we'll need to charge even more.
"Either way, it looks unattractive for CPs to commit to Openreach’s approach when potentially better alternatives are emerging."
He said the model could act as a deterrent for comms providers to build their own network using Openreach's ducts and poles. Ofcom recently proposed to slash the rental costs for smaller providers seeking to use Openreach's infrastructure.
Collins claimed that by Openreach’s own analysis, if alternative operators build competing FTTP networks, potentially using Openreach ducts and poles, the economic case for Openreach to deploy FTTP in the same area "is weakened considerably”.
He said BT was moving in the right direction. "Competitors are doing our bit to provide infrastructure across the UK, but our combined efforts won't do it all. So it's sensible Openreach finds the right commercial model and its FTTP rollout is additive to the other deployments underway rather than duplicating them. However, it's important CPs don't get locked into Openreach."
Matthew Hare, chief exec of small network provider Gigaclear, praised the consultation, saying it signalled "the beginning of the end" for copper networks. "Effectively what they are saying is, we are ready to start turning off the copper network."
An Openreach spokesperson said: "Deploying full fibre at scale will cost billions of pounds – we are currently in the process of exploring what we can do collectively across industry, government and regulators to minimise those costs.
"The exact costs involved would depend on a variety of factors – which is what the consultation is exploring.
"We also need to consider with CPs what the level of demand for full fibre is, and what the best way is for us to recover the costs of building any network. This process is ongoing and we will share more detail in due course." ®
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