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UK ultra-fast broadband to cost up to Ј28.8bn

09 сентября 2008

The cost to connect every U.K. household to an ultra-fast, fiber-based broadband network could be up to GBP28.8 billion, according to a report by the Broadband Stakeholder Group, which is advising the government on the issue.

The report, which will inform a government review into next generation broadband to be published later this month, focuses on the cost of a fiber network that could offer hugely faster download speeds than those available now.

Next generation, super-fast networks are seen as crucial to maintain economic competitiveness, just as incumbent operators and new players throughout Europe wrestle with how to fund them, what level of access they will provide to rivals, and at what cost.

The BSG report, produced by Analysys Mason, said rolling out fiber to the cabinet (FCCH), in which the very last part of the broadband connection from the street cabinet to the home uses existing copper wires, could cost substantially less, at around GBP5.1 billion, but would only allow download speeds of between 30 megabits per second and 100Mbps.

Taking fiber right to the home (FTTH), however, could cost up to GBP28.8 billion depending on the technology used and would allow broadband speeds of up to 1 gigabit per second, around 1,000 times faster than average 1Mbps download speed available on the current network, the majority of which is copper-wire based.

The report also found that the cost of deploying fiber in rural areas will be significantly higher than in urban, high-density areas.

Despite the high costs, the BSG has said in a previous report into next generation broadband that the economic and social benefits are expected to outweigh the initial financial outlay.

The economies of deployment in the U.K. are still being debated by the main players, including communications regulator Ofcom, former U.K. incumbent fixed-line operator BT Group PLC, cable company Virgin Media, which already has a fibre network, and H20 Networks Ltd, which earlier this year said it would roll out fiber to certain cities.

BT in July dropped plans for a share buyback and instead said it would invest GBP1.5 billion in a fiber network that aims to reach 10 million homes by 2012.

Moving to reassure potential investors in pricey fiber networks, Ofcom chief executive Ed Richards said in July that Ofcom favours a regulatory framework that will allow companies to make a rate of return on their investment commensurate with the risks of rolling out the new technology.

BT is allowed a 10% return on its investment when it sells wholesale access to its copper-wire network, but would be looking for more from fiber to reflect the higher investment risk.

Источник: Total Telecom

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