Access to BT’s dark fibre network will open new commercial possibilities for communication service providers
After sustained pressure from the UK telecoms regulator Ofcom BT has agreed to open up its dark fibre network to rival communications service providers (CSPs) from October 1st 2017. The new product – Dark Fibre Access (DFA) – should allow companies which want to lease BT’s network to deliver a wider range of higher speed network services to business and consumer customers under their own brand.
The business model will be different than that previously enabled by BT’s Openreach infrastructure division because it allows those third party CSPs to purchase and deploy their own network equipment rather than using the hardware and software that BT mandates for use on its network. By leasing only the fibre connection they have the opportunity to shop around the best price on optical routers for example, and experiment with software-based network function virtualisation (NFV) enabled hardware to provide operational cost savings which can be passed onto customers in the form of better value broadband packages or used to improve profit margins on service provision.
Dark fibre describes fibre cabling that has been laid in the ground but remains unused in that no optical signals are being transmitted on it. The extra capacity is usually held in reserve to meet rising demand and/or deliver extra bandwidth to customers within tiered service provision frameworks and to maintain recurring customer upgrade momentum.
In its Business Connectivity Market Review 2016 proposals, Ofcom stressed its belief that making BT’s dark fibre network assets more readily accessible to third party CSPs will promote healthier competition in the leased line and broadband markets, which has been an ongoing political aim of successive UK governments for many years.
The regulator’s initiative does not extend to dark fibre in London (including the City and Docklands) or Hull, where Ofcom already believes there is sufficient competition between multiple service providers. BT’s DFA covers any unlit optical path between 45km and 86km long and will be made available in two forms, standard and local access, with both available as either a single or pair of fibre strands according to the customer’s speed/bandwidth requirements.
Dark fibre access is already available from other wholesale fibre network suppliers in certain regions and cities of the UK, but the additional of BT’s network should expand the reach of high speed fibre broadband into many additional locations where current supply is either unavailable, patchy or limited to slow speeds.
As wholesale fibre suppliers like CityFibre and Virgin Media have already demonstrated with some success, dark fibre is useful for a number of distinct markets, including fibre to the premise (FTTP) deployments linking business premises to the Internet; fibre to the home (FTTH) which does the same thing for consumer and residential customers. It is also widely used by mobile network operators (MNOs) to link cellular masts and radio access network (RAN) nodes both to each other and wired telecommunication backbone networks, and can be deployed in point to point topologies linking two data centres, for example.
Some of those use cases are currently served by BTs Ethernet Access Direct (EAD) service, but EAD bandwidth is limited to 1Gbit/s and BT’s fixed fee pricing structure limits flexibility. In contrast wholesale broadband connectivity based on dark fibre links have enabled a new generation of regional CSPs – such as WarwickNet in Milton Keynes, County Broadband in Colchester, Geo Networks and B4RN in Lancashire, and Gigaclear in Berkshire and Essex – to offer anywhere between 1Gbit/s and 100Gbit/s of capacity to their customers depending on whether they target consumer or business markets.
The scope for third party CSPs to deliver ultrafast fibre broadband services in the UK will almost certainly be significantly broadened with the launch of DFA, but the move should also open up new commercial opportunities for systems integrators.
SIs can work in partnership with optical hardware suppliers to deliver optimal value to their customers. Those SIs also have the option of leasing dark fibre themselves to support broadband and managed service delivery for their own customers, or build cloud solutions on top of the network bandwidth and data centre hosting/colocation capabilities on offer either from BT itself or other colocation companies. Even if the SI does not own the customer itself, the need for communications service providers to install their own telecoms equipment opens up consultancy, professional services and implementation assistance during customer deployments in partnership with hardware suppliers.
The key advantage of DFA is that it should allow providers to take direct control of the connection to deliver their own service, at whatever cost they can manage. Whether that is possible may depend very much on how much BT charges for DFA, if there is more flexibility around pricing than is available for BT’s other wholesale services. Perhaps more crucially, its adoption may rely on regional CSPs being able to square the cost of leasing BT’s dark fibre and purchasing required equipment against customer utilisation in the FTTH/FTTP locations they connect.
Gigaclear focusses on delivering 5Gbit/s connections to its business and consumer customers in remote rural areas, for example, but it estimates its costs are around £1,000 for each property it passes – meaning high utilisation of the fibre broadband it installs is needed to make an effective business case despite favourable, if complicated, tax rates imposed by the government to encourage greater supply of high speed broadband.
BT’s DFA if also likely to have a significant effect on the current fibre broadband wholesale market – more opportunity will provide greater competition but it may also ruffle the feathers of existing wholesale suppliers which have already capitalised on demand for high speed fibre links that BT has not adequately addressed.
Rivals Sky, TalkTalk and Vodafone currently work with CityFibre in major UK cities to deliver business connectivity, with ongoing FTTH trials in York. And both CityFibre and Virgin Media originally voiced opposition to Ofcom’s proposals, no doubt fearing that by opening up its dark fibre network, CSPs which are already customers of BT will no longer be pushed into taking high speed wholesale services from elsewhere.
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