TalkTalk: ‘Affordable’ 1Gbps Ultrafast Can Restore Broadband Competition

TalkTalk says its plans to bring 1Gbps ‘ultrafast broadband’ to ten million properties will provide the UK with ‘futureproof’ infrastructure and boost competition in a market currently being stifled by BT Openreach’s dominance.

A joint-venture comprising TalkTalk, Sky and CityFibre, is building a city wide fibre to the premise (FTTP) network in York with a view to replicating it elsewhere if the initial project is successful.

Richard Sinclair, TalkTalk’s head of ultrafast, told Connected Britain in London, that its UFO (UltraFibreOptic) service will be affordable, offering the capacity and speed necessary for UK consumers and businesses, while delivering an alternative to Openreach.

Futureproof infrastructure

“1Gbps will make connectivity like electricity,” he said. “It futureproofs our homes so we’ll never have to worry about whether broadband is fast enough. The device will become the constraint, not the broadband connection.

“We are working really closely as a joint-venture with our partners Sky and CityFibre, but Sky and TalkTalk will compete at a retail level. This is great for consumers. it’s also challenging for us at times personally, but there will be genuine competition in price and services.

“As a challenger in the market, TalkTalk has always been about democratising technology. Our vision is for all of Britain, not just the most affluent parts of it, to have access.”

Nationwide expansion

Although TalkTalk has ambitions to cover 60 percent of the UK with FTTP, right now it says it is focused exclusively on making the York joint-venture a success and to test out network design principles, engineering processes and deployment economics.

Nationwide expansion is dependent on the cost of connecting each premise coming under £500 and the combined market share between the partners reaching 40 percent. TalkTalk hopes to connect its first customers in York in the autumn and is confident of reaching these targets.

One way it is reducing costs is through a ‘micro-trenching’ tool which creates small precision holes that can be easily filled back up again. Work can be carried out on the pavement, eliminating the need for lengthy street closures, which are among the most costly and complex parts of FTTP deployments.

“We can in the morning, dig a street and backfill before the residents come home,” said Sinclair. “If it wasn’t for the fact we notify residents in advance, some might never notice we’ve been. “It’s just one of the ways we’re trying to do things differently.”

Openreach spin-off

The aim of the project is for the partners to reduce their dependency on the Oprenreach fibre network, which TalkTalk says is too dominant and that the superfast broadband market is not as competitive as copper.

Sinclair reiterated his company’s view that Openreach and BT should be separated, arguing investment in non-fibre infrastructure has fallen by 30 percent, fibre wholesale prices are “twice” what should be and that rural businesses and SMBs are being overlooked. This, he said, is limiting adoption, harming consumers and affecting the economy.

“As Ofcom launches its once in a decade review, we believe now is the time to separate BT Openreach and create a market that better serves consumers,” he said. “An independent Openreach would be better able to exclusively manage Britain’s critical telecoms infrastructure rater than fight for its own management’s times and resources.

“It would create a much more competitive market and lower prices that drive takeup. It would give companies like TalkTalk a level playing field that we need to invest in ultrafast technologies.

BT rebuttal

“We don’t think the Ofcom review should be looking back, but seizing this opportunity to create market growth. We need to look forward to the next ten years. Put simply, we need a market that drives growth rather than constrains it.”

BT has denied such accusations, with the CEO of Openreach stating with “great confidence” that the division would not be spun off.

“I think there’s a wealth of evidence to say the current set up has been working very well,” he told journalists last month. “We forget, in early 2009 when the FTSE 100 was at 3,500-ish, when everyone was making people redundant, insolvencies were rocketing, unemployment was rocketing, [BT] made the decision to invest £2.5bn in a major infrastructure build. Could that have happened with separate entities?

“It’s a market that’s working very well. I think the case against [breakup] needs to be made.”

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