Fibre to the home - what might it cost ?
Yesterday’s news about FTTH created a stir, but what might a fibre service cost ?
Part of the answer is already in the public domain, from BT Openreach and BT Wholesale announcements relating to the Ebbsfleet pilot.
The fibre connection charge will be £130 and the monthly rental for a 10Mbits/s downstream (bursting to 30M) service will be £23.45 per month.
The equivalent charges now would be £88 for a new line, £34.86 to connect the ADSL then £7.01/month for the broadband plus £8.39/month for line rental, a total of £15.40 per month for current “up to 8M” services.
So at the wholesale level FTTH will cost £17 extra to setup as a new line and £8/month more for rental. These are ex-VAT wholesale prices which suggest at least £10-15 per month more on retail packages than current products especially if GB allowances are increased to cater for more use of the higher link speed.
This also gives a clue about the economics of FTTH to the provider, the cost of providing fibre in a new build is said to be about the same as providing copper, so the extra monthly rental is good news for the provider.
Of course, any provider interested in taking this service wholesale from BT would also have to factor in backhaul costs. How this service would be made available to wholesale channels is still unknown, but if it’s anything like the Ebbsfleet trial then a wholesale product will be offered by both BT Wholesale and BT Openreach. The BT Wholesale offering would require you to use Wholesale Broadband Connect (WBC), whereas the Openreach one requires providers to find their own backhaul (as with LLU services).
On a retrofit FTTH project the £500-£1000 per home connected looks marginal against an extra revenue of £8/month or £96/year but not impossible especially if costs are at the lower end.
The really interesting FTTH retrofit is when “anyone but BT” does it, and captures the whole £23.45 per month revenue without losing the existing copper line rental and ADSL broadband charge. “Anyone but BT” wouldn’t have the encumbrance of being regulated under the “Significant Market Power” rules either, which would further enhance their business case.
Tags: BT Openreach, FTTH, WBC
