It was long-held that the UK was on a low fibre diet. Not any more
Thursday was a frantic day of telco results. Having had some time to reflect on it, VMO2’s intention to upgrade its entire footprint to full fibre is probably the most significant aspect. It makes a lot of sense for the telco, given the marginal additional spend and the future benefits that will flow. BT will have expected the move, but that doesn’t mean they won’t be worried about it – particularly the prospect of it being made available on a wholesale basis.
The historical Virgin Media footprint is almost perfectly overlaid with that of BT, so the incumbent’s natural advantage becomes rural, remote and harder to reach premises where VMO2 is less present. Speaking to investors, BT’s chief executive Philip Jansen commented they were still looking for potential JV partners for an enhanced fibre build, and are now particularly keen to hear from those with ideas for reaching those exact types of premises. For now, that is likely to become BT’s strategic advantage.
Perhaps the most affected by all this will be Ofcom. They have only just completed the Wholesale Fixed Telecoms Market Review – a new mega market review which, according to Jansen at least, doesn’t come close to dealing with the challenges that a wholesale VMO2 offering would present. The other headache for them is the scale of fibre overbuild. With two national connectivity champions duplicating (potentially open) infrastructure, and a whole host of smaller players with no shortage of funding, questions will be asked again about how economically efficient some of this is. In the meantime, we are almost certain to see consolidation among fibre builders.
