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'Fibre to the premises' broadband rollout 'not financially feasible'

Wednesday, January 14th 2015 by Ellen Branagh

The slow rollout of fibre to the home (FTTH) in many countries is not because providers are unwilling, but because they are unable, according to one industry figure.

Michael Weissman, vice president for marketing at Sckipio Technologies, said the suggestion that major companies do not want to invest in FTTH is incorrect, but the cost means in many cases it is not financially feasible.

Sckipio manufactures chips and software for G.fast, which uses a combination of fibre and conventional copper wires to deliver gigabit speeds.

Speaking to Cable.co.uk at International CES, Mr Weissman said the expense of installing FTTH or fibre to the premises (FTTP) means it takes decades for companies to break even on the investment.

He said: “There’s this false argument that the layman has, which is, ‘BT is cheap and they’re unwilling to make such an investment. Not unable, unwilling’.”

Citing Australia’s nationwide FTTP rollout, which began in July 2009, he said the programme was still not complete because it is “really hard or really expensive”.

“The average telco will take more than 10 years to break even on a fibre to the home investment,” Mr Weissman said.

Cost increases

The huge outlay leads to large long-term loans with corresponding high interest rates which have to be subsidised by cost increases passed on to consumers, he said.

“Why is fibre expensive? Not because they want it to be. Because it has to be.”

The key to bringing prices down lies in competition, including the ability for telecoms providers to compete with cable companies.

“It’s not every market but many many markets and the UK is for sure one of those,” he added.

“The telcos have had their hands tied. They haven’t been technically or economically able to compete with speed because they didn’t have a way to do that, other than fibre, which is not financially feasible.

“And it’s not operationally feasible because of the installation time. Not just installation cost, they can’t get enough installers.”

Mr Weissman said the issue in Australia stemmed from the insistence on fibre rather than “fibre performance” or “fibre-type speeds”.

Advocating G.fast as a desirable solution, he said it would bring faster speeds, is cheaper to deploy, and is faster to implement.

“It’s the lowest cost per megabit delivered of any technology ever existed, including fibre.

“It’s the fastest to implement because it doesn’t require new wiring. So in many cases like in the UK you have cabinets that are close enough that have dark fibre in that cabinet, you drop one of those boxes in the cabinet and you mail a person one of those consumer devices.

“The installer doesn’t have to come, no technician, no scheduling the appointment, no waiting, no holes in the wall, none of the things that drive you crazy. They literally ship you a box, you plug your phone in and you’re live.”

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