NGN in the UK left open for public funding

A market led deployment of a next generation network is to be assessed by the government as it lays out a universal broadband service commitment in the UK.

The driving force for the coverage of a next-generation network (NGN) in the future could still be funded by the public according to the recent suggestion made by the UK government.

Private investment in next-generation networks from telecommunication companies like Virgin Media and BT based on uptake and deployment will be assessed by the government, and if the market does not deliver contingency measures will be implemented, said communication minister Lord Carter in the Digital Britain Interim Report.

A partner at Analysys Mason, Matt Yardley said “On the fixed side they’ve left the option open for potential government support.”

The NGN rollout plans by BT and Virgin Media should see each of the telco’s providing around half of the people in the UK with broadband access, he said. He went on to advise that for anything beyond that it would be up to the government and the network providers to look at the cost case for further coverage extensions where necessary.

He said “Our own research on rolling out a U.K. fibre network has shown that the cost remains constant for the first 60% of the population. BT has said that in the right regulatory framework it will invest £1.5 billion in a next-generation network that would reach roughly 40% of the population. If they can see a cost case for 40% then we believe it’s possible for them to go further to 60%.”

Under plans outlined by the government for a Universal Service Commitment, every home in the country would get minimum broadband access speeds of 2Mbps.

In a statement the head of telecoms at accountancy firm BSO Stoy Hayward, Richard Heap said “We were very surprised that the government is only advocating a broadband network speed of 2 Mbps by 2012. Given that a number of other ISPs offer speeds of up to 50 Mbps, this is akin to a snail’s pace and lacks ambition.”

The cost implications for adding just one megabit of capacity could be quite high, especially in the more remote and rural areas, according to Yardley who disagreed with this statement. He said “Raising the minimum speed to 2 Mbps can still support a good iPlayer experience, and a decent TV stream. It’s about taking what we’re capable of delivering now, and making sure that it’s delivered to everyone,” he added.