TalkTalk: BT Openreach Should Be Separated Despite Our 1Gbps FTTP Broadband Plans

TalkTalk says its ambition to offer 1Gbps broadband over fibre to the premise (FTTP) infrastructure to up to ten million properties does not undermine the argument that Openreach and BT should be separated.

Opponents argue the current structure gives BT little incentive to invest in the FTTP infrastructure they believe the UK needs and that it’s simply not economically viable to build a competing network unless it could bid for the wholesale contract for BT’s retail business.

A joint-venture between TalkTalk, Sky and CityFibre is currently holding a pilot in York to see if there is demand for FTTP and whether certain cost targets can be met. If successful, the model could be expanded elsewhere.

Economic argument

Indeed, TalkTalk is targeting 60 percent population coverage and says the tests have been a success so far. So far, the joint-venture has deployed 120 kilometres of fibre and connected 509 homes. 70,000GB of data has been downloaded over the network already.
But how can the York trial be so successful and yet TalkTalk and others argue it is impossible to do this on a national scale so long as BT and Openreach are under the same roof?

The answer TalkTalk gives is that while it might be able to deliver FTTP on a city-by-city basis, it would be impossible for it, or alternative providers like CityFibre or Gigaclear, to do so universally.

“We think the separation of Openreach is the right thing to do,” Richard Sinclair, head of ultrafast at TalkTalk told TechWeekEurope.

“Even with significant investment we will never get to every single corner of the UK. And even if we do, it would take us some time to get there. What all of this is about, is proof of concept, to demonstrate we can actually deliver state of the art services [to customers].

“TalkTalk’s view on Openreach has been well publicised elsewhere and I don’t pretend to be an expert on [matters between BT and Ofcom]. The whole point of providing FTTP independent of Openreach is about providing a transformational service to families and small businesses.”

But when?

TalkTalk has been fairly open about its bold targets for coverage, but it has been less vocal about when they might be achieved. So far all it has said is that it is committed to proving the viability of FTTP, although TechWeekEurope understands a more concrete timetable might be made public before the end of the year.

“We’ve said this can go to other cities,” added Sinclair. “We haven’t been specific about timelines because we’re trying to measure success factors. Such as cost factors, cost per premise and penetration. Once we’re better informed, then we can decide.

“We’ve always set out in this project of having a review at each stage in the process. We’ve a very detailed plan. We’ve taken this to the board, council. We’re probably reviewing every quarter.

“As the head of ultrafast, I’d love to say we’re rolling out nationally tomorrow.”

FTTP rivals

BT has recently committed to bring ultrafast broadband to 12 million homes and businesses by 2020, two million of which will be connected via FTTP. However FTTP coverage will mostly be limited to business parks, high streets and new housing developments, with the remainder covered via G.Fast, which speeds up copper connections.

Virgin Media has also pledged to deliver FTTP to 1 million premises as part of its £3 billion network expansion.

TalkTalk, Sky and Vodafone were among the signatories of an open letter to Ofcom which detailed a ten point proposal for a more independent Openreach. The proposals would give Openreach ownership and control of its assets, its own budget, and would allow competitors to compete for BT’s retail business contract.

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