BT risks ‘fading away’ in full-fibre future, says Ofcom CEO

Ofcom CEO Sharon White has warned BT that it is at risk of becoming defunct and forgotten if it does not do more to change course away from slow copper-based broadband services to ultrafast fibre-to-the-premises (FTTP), or full-fibre.

Speaking at an event in London, White reiterated Ofcom’s vision to “move the UK decisively away from a Victorian-era copper network to a modern, full-fibre network fitting for an advanced economy”.

While she praised Openreach CEO Clive Selley for his work to date in pivoting towards full-fibre broadband, White made the case that the market for full-fibre was becoming more competitive, with more FTTP investors ready to open their wallets. Earlier in the week, for example, Openreach competitor CityFibre was acquired by a private equity consortium.

“If incumbents who rely on copper don’t change course, they risk losing swathes of customers to full-fibre rivals,” said White. “Incumbents face a choice in my view – fibre-up, or risk fading away.”

“History is strewn with once-successful companies that failed to anticipate and act on shifts in customer demands and to innovate. Think Kodak, Polaroid, Palm and Blockbuster. The UK cannot afford for BT to be added to that list,” she said.

Currently, Openreach plans to pass three million UK premises with full-fibre broadband by 2020 as part of its Fibre First programme, which it launched at the beginning of February 2018.

Selley committed to fundamental change in “how Openreach thinks” and said it would now build FTTP as its network of first choice wherever possible.

“Reaching three million premises by 2020 sets Openreach on the right trajectory to achieve its ambition of building a 10 million FTTP footprint by the mid-2020s and, if the conditions are right, to go significantly beyond, bringing the benefits of FTTP to the majority of homes and businesses across the UK,” he said at the time.

“If incumbents who rely on copper don’t change course, they risk losing swathes of customers to full-fibre rivals. They face a choice – fibre-up, or risk fading away”

However, Selley has also warned that Openreach’s inclination to build full-fibre networks will hinge on its ability to generate an adequate return on its investment, and called for more support from Ofcom, the government and other network builders to help with this.

Meanwhile, White went on to set out how Ofcom was looking ahead to how it could better support long-term investment in UK broadband through a more consistent and coherent approach to market regulation.

She said its approach would “continue to be anchored in the principle of the fair bet”, meaning the certainty that risky investments will make a fair return.

Ofcom will also look to increase the length of time between its major market reviews from three to five years – giving regulatory changes more time to bed in – and was considering ways to give more coherence to business and residential broadband markets.

She also looked ahead to the publication of the government’s Future telecoms infrastructure review – which is being led by the Department for Digital, Culture, Media and Sport (DCMS) and is set to be made public this summer.

“Over the next few years, the number of homes and businesses able to benefit from full fibre is set to rise from one million to six million,” said White.

“That is one-fifth of homes and businesses – good progress, but some way short of the ambition that full-fibre is available nationwide. So we must build on the early momentum.”