Is BT's fibre rollout a waste of money?
Posted on 26 Nov 2009 at 15:26
BT has defended accusations that its £1.5bn fibre rollout is a "defensive" waste of money.
The telco has pledged to bring fibre broadband to ten million homes by 2012, reaching approximately 40% of the population. But critics have complained that BT is simply duplicating investment in areas already covered by Virgin's high-speed fibre network.
The company came under fire from sections of the audience at a Westminster eForum today, when asked whether it was "disappointing" that BT was spending so much money on a "defensive rollout" that's unlikely to greatly expand Britain's fibre footprint.
I'm slightly surprised that anyone would ask if we're disappointed with £1.5bn worth of investment in the current climate
"I'm slightly surprised that anyone would ask if we're disappointed with £1.5bn worth of investment in the current climate," replied BT's director of public affairs, Tim O'Sullivan. "People should take stock and have a dose of reality in these debates."
O'Sullivan went on to claim that 2.5 million of those 10 million customers would now receive fibre-to-the-premises (FTTP), which is currently capable of speeds of up to 100Mbits/sec. The rest will be on fibre-to-the-cabinet (FTTC), which achieves a maximum download speed of 40Mbits/sec.
Virgin on the offensive
Virgin Media echoed the criticism of BT's plans, with Jon James, executive director of broadband claiming that "the people who should be disappointed are BT's shareholders", because the company was spending £1.5bn in areas that were already offering connection speeds of up to 50Mbits/sec - faster than the majority of BT's lines.
He also dismissed the threat of BT's 100Mbits/sec FTTP, adding that Virgin is already trialling downloading speeds of up to 200Mbits/sec on its DOCSIS 3 network. "We can take it further north of 50Mbits/sec when we choose," he added.
However, there are doubts over whether the demand yet exists for these truly high-speed services. Virgin admitted that although it now offers 50Mbits/sec lines to 13 million homes, only just over 20,000 have decided to upgrade so far.
Author: Barry Collins
I'm sure if BT only invested in non-Virgin areas, they'd be accused of trying to create a monopoly...
By piphil on 26 Nov 2009 
It's not a waste as far as BT's bottom line is concerned as it will be moving into direct competition with Virgin, but as far as consumers and Britain's overall broadband strategy are concerned it's a monumental duplication of effort and a colossal waste of money. I hope no tax payer's money is going in to this. The state is not there to subsidise the private sector.
The UK government needs to get fiber to new customers, not to subsidies one company against another.
By Perfectblue97 on 26 Nov 2009 
Are there any blue chip company's the government does NOT subsidise?
As Virgin Media is far too expensive for most ( hence the low take up of its 50Mb service).
Most people can only afford ADSL+2 service that uses BT's network.
Now BT and Virgin Media can fight out a price war that might benefits the consumer.
Yes we tax payers are subsiding BT. However we are already subsiding loads of private company's:-
Car producers via the car scraping program.
Selected boiler fitting company's via the government grants for the old and people on benefits to get them fitted free.
Crude Oil via many wars over access to the stuff.
Banks Via Government cash loans / gifts.
Drug company's as our Fixed price NHS subscriptions don't reflect the low or high price of drugs, hence high price drugs are subsidised.
The list is endless, the real winners are the big company's who benefit from the Governments generosity on our behalf.
By Tibbs on 26 Nov 2009 
Low take up?
In my more cynical moments, I wonder if this is a deliberate ploy on the part of BT to justify not investing in fibre.
"We spent £1.5Million on bringing 40Mb to these areas and only a very small number of people wanted to be connected"
- Yes BT, because the rest are already customers of Virgin with 50Mb...
By greemble on 26 Nov 2009 
Virgin ex-customer
Virgin broadband failed too often and they always blamed my setup. My setup did not change I had to wait hours or days until they found the fault at their end. Their customer support was useless as they only knew Outlook Express as an email client and did not know that Virgin had more than one server. I now depend on a 45 year old BT copper line for broadband and get a better service.
A friend is charged £17 per month for 1Mbps and gets 640kbps from Virgin who offer 10Mbps for £14 but only if you are a new customer. Loyalty means nothing to them. We need BT fibre in Virgin areas.
By misceng on 3 Dec 2009 
Virgin customer still - just!
misceng - your friend is lucky!
My Virgin Broadband (up to 8Mbps) usually operates at less than 500Kbps and a few days ago dropped down to 18Kbps!
And, as you say, Virgin are not in the slightest bit interested, blaming it on my setup, even though my laptop is only about 18 months old and I've been complaining for about 3 years!
But is there anyone better if you don't live next door to the telephone exchange?
By Jaycee99 on 3 Dec 2009 
Not everyone in a Virgin area can get it!
I moved into a new house in a Virgin (then Telewest) area and they would not connect me as it would require digging a hole in the pavement and there was no budget to do so! I am moving soon to another property where the same thing applies.
By shallam0984 on 3 Dec 2009 
Not everyone in a Virgin area can get it!
I moved into a new house in a Virgin (then Telewest) area and they would not connect me as it would require digging a hole in the pavement and there was no budget to do so! I am moving soon to another property where the same thing applies.
By shallam0984 on 3 Dec 2009 
Exceptions are not the rule
Just because individual cases may be bad doesn't tell us anything about the majority of experience. I don't know any service that is 10% perfect for everyone. The idea that people are clamouring for 40-50Mb is drivel. I wouldn't base anything on the reports of people signed up to PC Pro! Most people, including me as a heavy internet user, sign up to the bottom speed. On Cable this is now 10Mb. I've checked mine and those of other people I know on Cable and the lowest tested speed I've ever seen is 9918 at busy times, with the majority being over 10Mb. Some people have a problem? Inevitably. It's the exception.
One friend inexplicably changed from Virgin to Sky in order to get HD and other services. Their broadband plumetted to less than 1Mb. I phoned up to get some technical help for them and was told their 8Mb service should be providing 1.6Mb at that time, not the 162k I'd measured. We tweaked some things and I measured 1.4Mb - technically the problem was solved. I tested again over the next hour and it plumetted to 1.2, 1.1 and ended around 800k. This was also normal with BT\Sky. Anyone using them would have to be mad, especially when a virtually guaranteed 10Mb was available at minimum cost.
BT fibre is a waste of money because the company and its contractors are institutionally incapable of installing it at the level of the exchange. I know this because I've worked for them. The hoops they require to jump through are so convoluted and reinforced by levels of "management" that it will simply never, ever, ever arrive.
Sad news for users. Great news for BT and contractors as they will have lucrative jobs for several lifetimes. Until people see this there will always be complaints. If BT ever got to the stage where they seriously could deliver fibre, they would find a way to prevent it happening.
By sidcelerye on 3 Dec 2009 
Oops
Meant "100% perfect" above, obviously :(
By sidcelerye on 3 Dec 2009 
colinday2
It would appear that some people don't understand the phrase 'being in a Virgin Media area', this doesn't mean you get Virgin broadband but that you get Virgin cable
By colinday2 on 3 Dec 2009 
Virgin Media
as colinday2 said being in the vicinity of a cable does not mean that you can get virgin broadband the afore mentioned cable bypasses my address by as litle as twenty meters or so so roll on BT fibre.
By phat_boab_6 on 10 Dec 2009 
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