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Total Telecom has to go all the way back to the Old Testament to find a comparable mismatch.
On the first anniversary of the Brexit referendum, and with divorce proceedings between the U.K. and the European Union getting underway this week, Total Telecom thought now would be a good time to consider whether the U.K. has the broadband infrastructure it needs to take on the best in the world.
If you’re pressed for time, here’s the situation as it stands today: no, it does not.
It is also important to consider whether the U.K. has the right plan to address its shortcomings, so that when Brexit comes, it will be better-placed to compete globally on its own.
The answer to that depends on who you ask, but the general tone from last week’s Connected Britain was that copper upgrades are good enough for now, but widespread Gigabit access, either by fibre-to-the-premises (FTTP) or Gigabit coax, is the ultimate goal.
Total Telecom caught up recently with Ronan Kelly, CTO, EMEA and APAC at broadband access kit maker Adtran, and president of the FTTH Council Europe, to get his full and frank appraisal of the situation.
"Depending on which operators you talk to, many will claim there’s a lack of demand for higher capacity broadband links, and I would tend to agree with them. Higher-capacity links tend to get consumed by what we would refer to as lead users, who typically represent 5% of the market," he said.
That doesn’t mean there is no case for upgrading networks to Gigabit speeds though; far from it.
"Bandwidth consumption always increases over time and that’s driven not by the users consciously choosing to consume more, it’s driven by the producers of consumer electronics, it’s driven by the application developers," Kelly said. "As more ubiquitous, very fast broadband becomes available, they can develop the applications and develop the electronics that can take advantage of that."
And that’s a crucial point to consider for whoever is in charge of the U.K. – a fairly open question right now – when it comes to setting broadband speed targets and designing the policy framework to achieve them.
It is important to give users a fast enough connection so they can benefit from the latest online services, but it is also extremely important as Brexit looms to encourage entrepreneurialism, so there’s a better chance that the next Google, Amazon, Facebook, Tencent, or Alibaba is founded in the U.K., and grows to a scale where it doesn’t need to sell out to a U.S. or Chinese company at the first opportunity.
"If you look at where all the real money is being made in the world today, it’s all around digital," Kelly said. "The largest companies in the world are all digital platforms."
The U.S. leads the way, he said, and China has some huge homegrown companies for which it would be a "relatively straightforward" task to expand abroad, he said.
"Europe has been slow out of the gates," Kelly continued, but it "is waking up to the fact that it needs to become a lot more competitive in that space and a lot more innovative, and that they need to put in place the infrastructure to allow that to happen."
After Brexit, "you’re going to have a situation where the U.K. is going to be competing not only with Europe but with the U.S. and China as well – against three Goliaths from a scale point of view – so it’s going to absolutely need world-class infrastructure to serve as that foundation for competition," he said.
As things stand today though, Kelly is concerned that the U.K. will come up short.
While the rhetoric around full-fibre is encouraging, the fact remains that only 2% of U.K. homes and businesses are connected to FTTP. What’s more, the government’s target is for 95% of premises to have superfast broadband by the end of this year, which is all well and good, but the government’s definition of superfast is at least 30 Mbps.
"Typically each [access technology] generation lasts a decade, so if telcos end up delivering a technology that is going to last for the next 10 years, but is only capable of delivering, say, 300 Mbps on a good day with the wind behind it, I personally think that’s going to put U.K. Inc. in a bad position," Kelly said.
By comparison, the EU has set a target of delivering a minimum 100 Mbps connection that is upgradeable to 1 Gbps to every premises by 2025, by which point, every public institution, business park, R&D facility, and educational establishment will have a minimum of 1 Gbps.
To get an idea about the kind of services and devices that require this bandwidth, you only need to look at the ever-increasing resolution of smartphone screens.
"Those resolutions are not going to stop at 4K; the reason handset manufacturers are going up in resolution is not so I have an ever-sharper picture to look at when I’m on Netflix, it’s so they can compete in the virtual reality market," Kelly said.
In virtual reality (VR), the end user’s field of view at any given moment is 120 degrees, or a third of a 360-degree image. Therefore, in order to deliver a 4K field of view for a virtual reality user, the resolution for that whole, wraparound image needs to be more like 12K.
At that resolution, virtual reality users are still susceptible to motion sickness though. In order to make the experience more comfortable, the field of view alone needs to be at least 12K.
"We’re talking about hundreds of Megabits per second" to carry that over the Internet, Kelly said.
However, VR is an occasional technology, he said, that will be used intermittently for immersive gaming, or viewing experiences. The elephant in the room is augmented reality (AR).
"Everyone talks about VR being the big bandwidth hog because we see how media rich it is, and when they talk about AR – augmented reality – we tend to think about it in the context of a heads-up display in a car, fairly low-resolution graphics," Kelly said. "The thing is though, it doesn’t have to be."
Graphic overlays in AR becoming more and more advanced, Kelly continued, but the big difference between AR and VR is that AR will be an always-on technology.
"All of those things are going to require huge amounts of bandwidth to make them practical" Kelly said. "And this is what worries me when we start to see incumbents make short-term investments in broadband technology."
To get from where the U.K. is right now to where it needs to be after Brexit, it is vital that regulators create the environment that gives investors the confidence to fund infrastructure deployment.
Here too, the tone across Europe and the U.K. is changing from one focused on preserving competition at all costs, to one that is more concerned with focusing regulatory interventions on areas where there has been a market failure.
"The number one most important thing for investors is predictability," Kelly said. That doesn’t necessarily mean giving telcos a regulatory holiday, "it’s about giving them confidence."
