By Tristia Harrison, TalkTalk Chief Executive
We hear a lot about Britain having a world leading digital economy. From cloud computing to new uses for artificial intelligence, this is something with huge potential and which we should all be very proud of.
However, while we should be optimistic about the future, we shouldn’t forget the reality that this economy has been built despite our infrastructure, not because of it. If we want to continue to grow, we need to improve the infrastructure which underpins it.
Full-fibre (FTTP) networks are the critical infrastructure of the next 100 years, but we trail the world in rolling it out. Other European countries already have FTTP coverage of 70-80%. Britain has less than 5%.
We are therefore very pleased to see significant developments by Government, Ofcom and industry this week, as they share our vision to accelerate investment in Britain’s digital economy.
In the findings of its Future Telecoms Infrastructure Review published this week, the Government agrees with us that Britain needs much more full-fibre. But it recognises that we cannot just rely on the incumbent to deliver. They want to make it easier and cheaper for companies other than Openreach to build networks.
Competition is key to drive full-fibre investment
We’ve always been clear at TalkTalk that competition is exactly what will deliver the investment Britain needs. That is why we’ve agreed heads of terms with Infracapital to create a new company to build a full-fibre broadband network for Britain. The new network will reach more than three million homes and businesses, transforming broadband speeds and reliability. Plans are developing at pace and we look forward to sharing more details over the summer.
This of course builds on our successful full-fibre pilot in York, Britain’s first Gigabit city. The trial has proved that FTTP can be built affordably and that there is strong consumer demand for it. Working with Sky as a retail partner, our FTTP product enjoys the highest customer satisfaction in the industry. During a visit to the city last week, Digital Minister Margot James MP saw for herself how brilliant connectivity can bring about significant consumer and business benefits.
We therefore also welcome the Government’s commitment to remove some of the barriers companies face when trying to invest in new networks. They’re going to change the law to make it easier to get permissions to build, simpler to connect blocks of flats and will streamline the rules around closing roads and digging. This should make it quicker and cheaper for non-Openreach companies to build. The Government also pledges to make it easier for companies other than Openreach to use existing infrastructure, such as BT ducts and poles - a long overdue reform. All this work is essential if we are to deliver new networks and we will work with the Government as they implement this reform.
Of course, we will continue to work with Openreach in those areas outside the footprint of our new company. And we welcome their plans to increase their own FTTP footprint. If our recent announcement drives others to increase the pace or ambition of their own rollouts, that can only be a good thing for customers. It’s also encouraging to see new providers injecting much needed competition into the telecoms infrastructure over the last year.
But apart from competition, there are also two further essential factors that are needed for full-fibre roll-out to be successful.
The first requirement is a scalable customer base. Full-fibre networks are only viable where you can secure high take-up over a reasonable period. That is why Openreach’s decision this week to lower wholesale superfast and ultrafast pricing for companies such as TalkTalk is great news.
It will lead to happier, more loyal customers as they will enjoy the benefits of faster, more reliable connectivity. But just as importantly, ensuring more and more customers enjoy the benefits of part-fibre (FTTC) over the coming months and years will drive investment and make it much easier to migrate them onto a FTTP network in due course.
The second requirement is price competitiveness. As the value broadband provider, we want to make sure that full-fibre is available to everyone at an affordable price. It cannot be priced at a significant premium.
Not only does that risk excluding low-income groups from essential digital infrastructure but it would also make it very difficult to get the high take-up that is required for this to work. Instead it would risk creating expensive white elephants in cities across the UK, with cutting-edge infrastructure left unused by most homes and businesses. Our experience shows that if priced appropriately, FTTP can be a mass-market product.
And as we take pride in our ‘for everyone’ motto, we welcome the Government’s commitment to subsidising FTTP investment in rural areas, ensuring no one is left behind. This is the right approach and we look forward to hearing more about the Government’s plans to fund this investment.
A lot of detail has been published this week and change will not happen overnight. But we’re delighted to have a Government and regulator that not only shares our commitment to full fibre but agrees that infrastructure competition is the best way of delivering it. Now is the time for scale investment and build the world class broadband British consumers deserve.