BT Openreach shies away from fibre investment

October 2, 2015

According to Amy Chalfen, director of equivalence and regulatory and public affairs at BT Openreach, the company is concerned that it would not receive an adequate return on investment in the fibre instrastructure needed to provide next-generation broadband.

In an interview with ZDNet.co.uk, Chalfen commented that the company is more concerned about the expected level of demand for high-speed broadband, than regulatory issues surrounding it.

The investment is required in the last mile of the PSTN between telephone exchanges and homes or businesses, which is based on copper wires.

This local loop transmits data at a much slower rate than the fibre technology which forms most of the UK’s broadband infrastructure, and could cause a bottleneck in connectivity when services such as high-definition video take off.

Matt Beal, chief technical officer of BT Wholesale, said in April that the company might be unwilling to invest substantially in fibre access, because under current regulations other companies would be able to use the new infrastructure, with having to contribute to the cost of building it.

However, Chalfen has now said that this would not be the main problem, and the real debate lies with what services need to be enabled. Chalfen believes that the technological community is fully-aware of the benefits of fibre, and the question lies with when the benefits become an investable opportunity.

Chalfen welcomed Ofcom’s recently launched consultation into high-speed broadband access, and said it was as much about which services need to be enabled, as about fibre itself.

Openreach, BT’s local network business is distinct from the retail arm of the company. Chalfen’s view echoes comments made earlier by BT Openreach’s chief executive, Steve Robertson, who said that fibre would not take off unless companies such as Tiscali, BT Retail and Sky, agree what sort of networks they need and what services they are going to run.