Is broadband’s bargain basement pricing to blame?

The ‘superfast broadband’ rollout has regularly come under fire for its focus on utilising FTTC rather than FTTP/H to deliver superfast services to 100% of the UK population by 2017, but is the lack of FTTP coverage simply due to the ongoing rock bottom price war we are seeing across the broadband market? [caption id="attachment_85" align="alignleft" width="128"]Steve Lalonde, Chief Technical Officer[/caption] While FTTC delivers superfast broadband speeds to its customers of up to 80Mbps, critics argue that this is not future-proof enough to accommodate our ever increasing demands and we should be aiming to implement FTTP which delivers speeds of up to 330Mbps. However, FTTP coverage is currently very limited and the initial target of delivering the service to 2.5 million premises was cut back in 2013, due to its expensive and more difficult installation.

• ISPReview.co.uk: BT Abandons Original Rollout Target for Native UK FTTP Broadband

Why are we settling for FTTC rather than FTTP? Could the ever decreasing headline broadband prices be to blame for the UK’s lack of investment into more future-proof broadband? In the “good old days” broadband was a premium service with much higher monthly costs and providers were earning healthy margins from the services. In the early 2000’s customers would typically pay around £50 per month for a broadband service that would now be seen as slow! This meant providers had more revenue available to re-invest into their infrastructures. However over time, as newer technologies have emerged, habits have changed and broadband has become part and parcel of our lives, while competition in the market has pushed down the price and squeezed providers’ margins. We are now on the brink of broadband becoming a commodity service with potentially bargain basement pricing. Only a few weeks ago we saw headline pricing of 99p per week, admittedly with a lot of caveats and additional charges for things like line rental, but still!

• ISPReview.co.uk: UK 99p Stores Add Offer of 99p Per Week Unlimited Broadband

The lower pricing and margins inevitably result in less money being made available for reinvestment. So can you really blame the carriers for promoting the cheaper, albeit less future-proof, option? FTTC is cheaper to rollout as it utilises part of the existing copper network rather than implementing a full fibre connection to the premises when delivering FTTP. Whilst we would love to see FTTP coverage extended and availability increased, we also understand the financial constraints faced by the likes of BT when trying to deliver such an immense rollout scheme, even with Government funding. The problem is, FTTC is great for the here and now and is proving extremely popular with residential and business customers but, as demand continues to increase as it inevitably will, just how long will FTTC be able to adequately satisfy our requirements before a full fibre solution is the only answer? What will happen then - do we have to start all over again with another ‘superfast rollout scheme’? In response, BT are introducing intermediary solutions such as FoD (FTTP on Demand) and FTTRN (Fibre to the Remote Node). Similarly, as the price of Ethernet services continues to drop and services such as GEA and EFM grow in popularity, maybe this won’t become an issue. Nonetheless, it remains a shame that more hasn’t been done to extend the FTTP footprint throughout the UK. Have your say! Do you think FTTC can continue to satisfy our demands or should more have been done to deliver FTTP based services? Are you already getting requests for faster solutions? Do you think Ethernet based solutions such as EFM and GEA could bridge the gap? Let us know your thoughts and share your experiences by leaving us a comment below. Related Articles

• Entanet Opinion: Focus on fibre: How can resellers benefit from the rollout’s progress?
• Entanet Opinion: Fibre Broadband Jumping Hurdles
• Entanet Opinion: Fuss ‘n’ Fibre

Further Information

• ISPReview.co.uk: UPDATE BT Prep UK Fibre-to-the-Remote-Node FTTRN Broadband Trials
• ISPReview.co.uk: BT Openreach Hike the Price of Already Expensive 330Mbps Fibre on Demand

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