New UK communication network to cost billions

The gigantic cost of upgrading Britain's communications systems with the latest technology that science has to offer has forced a rethink among experts and policy makers. In fact, several of them are already lobbying for a scaled-down version of the £28.8 billion ($52 billion / Rs228,153.6 crore) project by opting for its less expensive £5.1 billion ($9 billion) counterpart.

The gigantic cost of building a full end-to-end fibre next generation broadband network across the UK may create a compelling case for getting on with rolling out fibre to the cabinet (FTTC) in the next few years instead. While FTTC would set the country back by about £5.1 billion, the more expensive full fibre to the home (FTTH) may cost as much as £28.8 billion.

While the UK's broadband infrastructure is based on a fibre backbone, the so-called 'last mile' connections between homes and telephone exchanges are almost entirely copper-based - creating potential speed bottlenecks, especially as bandwidth-heavy online applications such as video players become increasingly popular. This last mile issue is referred to as 'next generation access' (NGA).

FTTC refers to laying fibre between the exchange and the street cabinet, while FTTH means replacing the copper line from the cabinet to the home as well to create a full end-to-end fibre connection.

The Broadband Stakeholder Group, in a report published yesterday, produced for it by Analysis Mason (Cambridge, England), said the cost of deploying a fiber-based network would be between £5.1 billion and £28.8 billion, depending on the technology used. Implementing even the first option would entail costs equal to three or four times what the telecom sector spent deploying today's broadband services.

"The scale of the costs looks daunting but the report does shed light on how some of these costs can be reduced and what the likely extent of commercial rollout will be. It should focus minds of commercial players, policy makers and regulators on the potential solutions to these challenges," noted Antony Walker, CEO of the BSG.

The report suggests that deployment costs will be relatively constant across higher density areas. This implies that, if a commercial case for deployment exists, the market should be able to deliver to approximately two thirds of the UK population.

However, the costs of deploying in more sparsely populated areas will be significantly higher, making the commercial deployment to the last third of UK households much more difficult. As a result, the country may end up having a two-tier super fast broadband network.

"If rural areas are to be served in a reasonable timeframe, thinking needs to start now about creative solutions for making them more attractive to investment," suggests Walker.