Sunday, January 26th, 2020 (9:33 am) - Score 36,047

Network provider Openreach (BT) has announced that 227 new UK locations – 250,000 premises – are being added to the roll-out phase of their 1Gbps capable Fibre-to-the-Premises (FTTP) broadband ISP technology, which this time appears to focus on some of the “harder to reach” villages, market towns and rural areas.

At present the operator’s Fibre First project has already helped cover over 2 million premises and they’re building FTTP at a rate of c.26,000 premises per week (up from 13,000 a year ago), which is forecast to reach 30,000 per week when they exit the 2019/20 period. All of this forms part of their target to cover 4 million UK homes and businesses by March 2021, followed by an ambition for 15 million by around 2025 and then beyond. By our estimate reaching 15 million premises could cost Openreach c.£5.25bn.

Most of this “full fibre” build is still being delivered at the “lower end” of their £300 – £400 per premises passed cost range and going forward they expect to “pass around 50% of UK premises within this range of costs.” But deployment costs rise disproportionately the further you go outside of lucrative urban areas, which at an extreme could reach up to c.£4,000 per premises (here) and that is a big roadblock for commercial build.

The above has a lot of relevance since many of the new locations set to be announced are also some of the hardest and most expensive to reach (albeit perhaps not to the dizzy heights of £4k). Openreach has recently been conducting a pilot scheme in 13 rural villages and towns (here), which covered 50,000 premises and aimed to reduce the cost of such work. The operator is now putting some of that effort to good use.

NOTE: The pilot tested remote FTTP nodes (Mini OLT) in street cabinets, ditch witch, micro ducting, ground penetrating radar, diamond cutters (trench digging), mobile planning (Orion) and GeoRipper (used for digging trenches across soft ground at pace).

Clive Selley, Openreach CEO, said: “Our full fibre build programme is going great guns – having passed over 2 million premises already on the way to our 4m target by March 2021. We’re now building at around 26,000 premises a week in over 100 locations – reaching a new home or business every 23 seconds That’s up from 13,000 premises a week this time last year. Openreach has always been committed to doing our bit in rural Britain – delivering network upgrades in communities that are harder to reach and less densely populated. We intend to build a significant portion of our full-fibre network in these harder to reach areas of the UK and are announcing 227 locations today. Our ambition is to reach 15 million premises by mid-2020s if right investment conditions are in place. Currently, the biggest missing piece of this puzzle is getting an exemption from business rates on building fibre cables which is critical for any fibre builder’s long-term investment case.”

Some of the 227 locations – covering 250,000 premises in total – expected to benefit from this announcement include Aberdare and Camarthen (South Wales), Beaminster (Dorset), Buckfastleigh and Budleigh Salterton (Devon), Clitheroe (Lancashire), Ely (Cambridgeshire), East Grinstead (Surrey), Liskeard (Cornwall) and Shaftesbury (Dorset). Not places we’d usually expect to see being connected to Openreach’s FTTP at this early stage.

The build for these areas is apparently due to begin “before” March 2021, which means they’ll contribute toward Openreach’s existing 4 million premises target. What’s less clear is how much of each area will actually be covered by their FTTP, since it’s not uncommon for operators to only cover part of the locations they announce rather than 100% (this doesn’t prevent a later return for more infill build).

Ofcom’s recent proposal to relax some of their regulation will no doubt help to support all of this (here) but some obstacles, like the Fibre Tax, remain and most operators would like to see the Government tackle that one. At present there’s a 5 year holiday on business rates for new fibre but operators need to plan build and payback for 15-20 years ahead.

NOTE: Scotland has introduced a 10 year holiday on business rates for new fibre ( Scotland has introduced a 10 year holiday on business rates for new fibre ( here ).

We should remind readers that this predominantly reflects Openreach’s purely commercial investment, which for the time being remains largely focused upon the most lucrative areas (cities, big towns and large villages). Separately they’re also still rolling out some FTTP into remote rural areas via the Building Digital UK (BDUK) linked state aid schemes.

All of this will no doubt help the Government to achieve their ambition of deploying “gigabit-capable” broadband networks to cover the whole of the United Kingdom by around 2025 (here), which we should say will also involve input from many alternative network ISPs. Nevertheless today’s news could be seen as Openreach making a clear case for some of that £5bn being offered by the Government.

At present the top fastest consumer (residential) focused FTTP tier on Openreach’s network is 330Mbps (50Mbps upload), although the more affordable 550Mbps and 1000Mbps tiers (currently these are only options for business users) are set to be introduced for homes from 23rd March 2020 (here). Sadly we don’t yet know which ISPs will offer these but check out our Summary of Openreach FTTP ISP choices for ideas.

Openreach are expected to issue a press release and list of all the locations tomorrow morning. However it looks like the Telegraph got an exclusive, thus we’re summarising the locations from their article above. We will naturally update this article to include the full list tomorrow.

UPDATE 27th Jan – 6:41am

We’ve added the locations below and some extra details above from the official press release. Openreach also announced that more than 120,000 homes and businesses across the UK have also signed up to their Community Fibre Partnership (CFP) scheme (co-funded deployments of FTTP with communities).

Openreach’s 227 Rural / Semi-Rural FTTP Locations