BT Will Be A ‘Follower’, Not A Leader In Converged Networks

BT will look to Europe for guidance on how to build hybrid fixed-mobile networks if it receives approval for its proposed £12.5bn acquisition of EE.

Prior to its takeover bid for EE, BT was planning an ‘inside out’ network powered by a mobile virtual network operator (MVNO) and the 2.6GHz spectrum it acquired in the 2013 4G auction, with customers’ home routers acting as mini-masts that can offload traffic onto the fixed network.

That plan ran into reported technical difficulties but this vision of a converged network is still one that BT hopes to achieve if the EE deal is given the greenlight by the Competition and Markets Authority (CMA).

Hybrid future

Speaking at Broadband World Forum in London, BT CEO Gavin Patterson outlined how the company’s plans for ultrafast broadband and fibre expansion would help the UK maintain its position as the world’s leading digital economy, but with hybrid networks, it will look elsewhere for inspiration.

“In the UK, we will be a follower, not a leader,” he said in response to TechWeekEurope’s question after his presentation. “The convergence between fixed and wireless networks is taking place across many countries in continental Europe for example, so what I anticipate is that there will be new bundles of fixed and mobile services.

“We will begin to deliver services that are converged so they won’t be tethered to either fixed or wireless and will be a combination of both. So for the customer it will be ubiquitous in terms of connectivity.

“Its early days, we haven’t had the acquisition of EE confirmed yet, but we’re certainly very excited about the potential it brings.”

“The distinction between fixed and mobile networks has almost vanished. Our customers expect constant connectivity.”

Better together

Ofcom is currently in the middle of a once-in-a-decade review of the UK communications market and BT’s competitors are calling for Openreach to be separated from BT, claiming the current structure stifles investment and hands BT an unfair advantage.

Patterson used the opportunity to praise BT’s fibre rollout and the need for Ofcom to maintain a regulatory environment in which the company is encouraged to invest and said an independent Openreach would not be as effective as it would lack the capital and access to BT’s R&D.

“In the midst of the financial crisis, BT invested big while others held back,” he said. “The rollout of fibre has been a big success in the UK. Were on budget and on track. There are more people able to connect to superfast broadband than the mains gas supply.

“This fibre success story is no accident. It has been triggered by investment and competitive environment.

“If BT had been separated in 2008, I doubt very much whether Openreach would have made the investments to keep the UK ahead as an Internet economy.”

Pledges

BT recently promised to deliver ultrafast broadband of between 300Mbps and 1Gbps using a combination of G.Fast, which speeds up copper connections, and fibre to the premise (FTTP), increase the minimum universal speed to 10Mbps and deliver fibre beyond the government’s 95 percent coverage.

“The work we’re pioneering is showing the enormous potential of a mixed economy network,” said Patterson, claiming fibre to the cabinet (FTTC) is much easier, cheaper and quicker to deploy than pure FTTP.

However these commitments are dependent on the outcome of Ofcom’s review, although BT is keen to work with the government again, having received the lion’s share of funding available under Broadband Delivery UK (BDUK), much to the displeasure of some politicians. Virgin Media opposes any new subsidies, claiming infrastructure investment should come from the private sector.

“All four pledges have dependencies on the UK government and Ofcom to ensure the right regulatory framework exists,” he concluded. “BT is committed to providing the UK with the digital foundation it needs, but it will need all of us. It needs to be a genuinely collaborative effort.

“To be absolutely clear, if there was to be future public funding for fibre, we do not assume that goes to BT. We welcome the contribution from other players”