Is this the true cost of Final Third fibre to the home?
The true cost of providing fibre-based broadband access in the Final Third is murky and controversial.
Market analyst Analysys Mason has produced a new report that looks at the numbers associated with installing fibre to the home (FTTH), widely seen as the “future-proof” solution. It compares the costs of using BT’s Physical Infrastructure Access product (i.e. rental of BT’s ducts and poles), with the DIY option. It finds that over 10 years, the cost of deployment is 78% of the total cost, rental 12% and maintenance 10%.
PIA itself is controversial. BT introduced it at Ofcom’s request. The first reference offer drew howls of protest from the industry. A second offer cut prices some 40% to 50%, but introduced some new costs.
Analysys Mason quotes Ofcom CEO Ed Richards saying, in 2011, “PIA allows other providers to compete to invest in superfast broadband in areas where VULA is not available. In areas where BT has no commercial plans to invest, PIA will allow other providers to bid for government (BDUK) funding”.
Several suppliers invited to bid for NGA business under the BDUK rural procurement framework withdrew because of PIA. They said restrictions on usage (especially the ban on selling leased lines) meant they could not recover costs from as wide a customer pool as BT; this made it impossible to compete on price with BT.
Although Analysys Mason’s assumptions and sums are hidden behind a paywall (AM is after all a profit-seeking company), report co-author Richard Linton was kind enough respond to some questions.
Do you have a figure for the average cost to run fibre to the home in the Final Third?
Based on the data used in the report, the CPPP results averaged over all exchange areas are:
|Traditional trenching techniques||
|Slot-cutting in roads and footpaths||
|Slot-cutting with mole-ploughing||
PIA assumes a data network overlay on a telephone network. How do the costs differ if you build and operate a custom broadband data network for 5, 10, 15, and 20 years compared to using PIA and an overlay? How do they change if 50% of backhaul from a village PoP to an exchange or peering point is on microwave?
The two cases considered in the report are PIA plus 100% self-build fibre, and the new fibre network could be used to deliver voice and data services, or just data. Costs are dominated by deployment costs for fibre-cable.
The viability of microwave as a substitute for feeder fibre will be heavily dependent on local conditions e.g. how many microwave hops are required, and how much space is available for fibre in incumbent’s ducts.
Assume average CPE throughput speeds go from 10Mbps to 10Gbps over 20 years. Would that affect the PIA network more than the custom network?
To achieve a guaranteed 10Gbps per premises would probably require an upgrade to point to point fibre, or WDM PON (wave division multiplexed passive optical network).
For a point to point solution, extra fibre would to have to be commissioned on the exchange side of the optical splitters. This may be more of a problem for the cases where space is rented from incumbents i.e. where PIA is used, and will depend on the level of congestion in the feeder routes at the time of the intended upgrade.
One approach could be for the new entrant to install, where possible, an empty tube (micro-duct) at Day 1, and simply blow fibre into that tube when an upgrade to a point to point solution is required.
If (AWG*-based) PON were to be deployed, new AWGs may have to be installed to complement existing splitters, at existing splitter sites. If PIA were used, this would not be a problem for the new entrant, providing they had installed splitters in their own boxes which had sufficient extra space for the new components.
*AWG – Arrayed Waveguide Grating, a device, built with silicon planar lightwave circuits (PLC), that allows multiple wavelengths to be combined and separated in a dense wavelength division multiplexing (DWDM) system, says Fibre Optics Info.