Mark Jackson


Mobile operator and ISP Vodafone UK has today moved to mix the on-going rollout of their new 1Gbps capable Fibre-to-the-Premises (FTTP) based “Gigafast Broadband” network with Cityfibre by striking a new commercial deal with Openreach (BT), which gives them access to the latter’s “full fibre” network too.

At present Vodafone’s Gigafast FTTP packages are only available via Cityfibre’s new network as part of an exclusivity deal, which remains in place until each city network build has completed. Cityfibre is currently in the process of investing £2.5bn to cover a “minimum” of 1 million homes and businesses in 12 initial cities and towns by the end of 2021 (Phase 1), which aims to reach 5 million premises across 37 cities and towns by the end of 2025 (here); so far they’ve completed 106,000 premises and are rapidly ramping-up their rollout.

By comparison Openreach (BT) aim to cover 4 million premises with FTTP by March 2021 and then 15 million by around 2025 (currently 1.8 million completed). However both networks have some overlap between each other, while their wholesale pricing and speed tiers are quite different (Cityfibre is symmetrical but Openreach FTTP is asymmetrical with slower uploads), which can make mixing different networks tedious for ISPs.

On the other hand Openreach has recently reduced their full fibre prices (here and here) and they’re preparing to offer a series of targeted discounts from early 2020 (here), which might help to address some of that imbalance between their network and rival alternative networks (altnets). Nevertheless, just creating an ordering system for multiple networks can be a slow and costly process for any ISP.

The challenges mentioned above may help to explain why today’s announcement will initially only include part of Openreach’s new FTTP network. From spring 2020, Vodafone will start making Vodafone Gigafast Broadband available to customers in Birmingham, Bristol and Liverpool via Openreach’s FTTP. At present Cityfibre’s rival FTTP is not building in any of those three, although Bristol is on their tentative future list.

The service will then “grow as Openreach expands its footprint and will be available to 500,000 premises in these locations by mid-2021 under phase one of this strategic agreement,” which is well below the 1.8 million premises that they can cover today. The agreement “includes the option for further phases that could extend coverage to other places.”

By mixing the two networks Vodafone can now say that their Gigafast Broadband is “currently live or planned in 15 cities or towns.” So far, Vodafone Gigafast Broadband has already gone live in Aberdeen, Bournemouth, Coventry, Huddersfield, Milton Keynes, Peterborough and Stirling via Cityfibre, with additional places to follow this year and next (e.g. Cityfibre will shortly go live in Cambridge, Edinburgh, Leeds, Northampton and Southend-on-Sea).

Nick Jeffery, Vodafone UK CEO, said:

“Vodafone is committed to a full fibre future and to creating the infrastructure Britain needs to compete and win in the digital era. This initiative with Openreach builds on our existing commitments with CityFibre and underlines our belief in the power of digital technology to connect people for a better future and unlock economic growth for the UK.”

Clive Selley, Openreach CEO, said:

“Our full fibre broadband network already covers more than 1.9 million premises in the UK, and Openreach engineers are building it to another home or business every 26 seconds. We’re keen to upgrade customers as quickly as possible to this new, ultrafast, future-proof platform, so we’re proud that Vodafone’s placing its confidence in Openreach to deliver a great broadband experience for their customers. We’re determined to be the partner of choice for all Communications Providers and we’ll do that by offering the best connectivity and service with the widest possible coverage throughout the country.”

The mixing of two competing full fibre networks – especially ones with some big differences – is a significant change in the market and one of the first deals of its kind from a major ISP, although Sky Broadband have also been openly talking about engaging with altnet providers (they’re currently Openreach dependent) and TalkTalk look set to mix their own FibreNation FTTP build with that of Openreach’s products in the future.

Vodafone are clearly hedging their bets a bit here, although they’re also being polite to Cityfibre by respecting the existing agreement and seemingly not taking a service from both in the same areas. We suspect this may change further down the road, depending upon how the market pans out and their exclusivity arrangements.

One big other question this raises concerns how Vodafone will approach the promotion of their Gigafast packages. At present they headline with Cityfibre’s cheap symmetric speed services and they won’t want to confuse consumers, which could result in certain packages only being shown after an availability check is run.

Interestingly the press release says all of this will complement Vodafone’s “availability of 5G in more places than anyone else, with 58 cities across the UK and the rest of Europe now live,” although they don’t mention any backhaul (capacity) agreement with Openreach; this may just be a general remark rather than a specific reference to the new deal.

One thing is certain, as the number of competing full fibre networks grows then so too will the desire for retail ISPs to make use of more than one of them. All of this could be further reinforced once Virgin Media (Liberty Networks) sets out their rumoured wholesale proposition, which could be announced in the near future. The UK fibre market is going through a very fundamental change.

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