Archive for the 'BT Wholesale' Category

Another one bites the dust

…and no this isn’t about Eyjafjallajokull, but more about the demise of another LLU operator, in Orange.

It was reported last week by the Times that Orange have outsourced their infrastructure to BT Wholesale, in a similar deal to that penned by KCOM last year. The article referenced a Bruno Duarte, VP of strategy, who stated that “We are not satisfied with where we stand with broadband, as our customer base is declining and our performance is poor. But we need to remain in fixed-line broadband so decided to fundamentally change what we are doing,”

Personally I think that it’s a shame that this happened. Some may say it was inevitable, due to the operator haemoraging customers, and when presented with the figures, it’s hard to disagree. However I hark back to the time when Freeserve were one of the first ADSL2+ suppliers, with both a good product and nationwide reach, and from these beginnings, it’s a shame that they’ve ended this way. It’s a strange cycle, whereby an LLU network feels the need to outsource maintenance of their infrastrucutre back to BT, especially after the deregulation of the industry in the early noughties. I guess it’s a sign of how competitive the broadband industry has become. No doubt one of the drivers was to provide much needed funds for their impending merger with T-Mobile.

As a mobile operator with their own network. Orange could be seen as being quite unique in their market, especially with the landscape shifting towards providing converged IP solutions. Although the force of this won’t be felt for some time, it’s clear to see that many newer customers at market 3 exchanges will be presented with an IPStream connect tail as opposed to Orange LLU. And although for BT this can be seen as a major coup, for Orange I feel that as a cost cutting exercise, they may have made a decision they will come to regret in the future.

To Infinity and beyond?

Fibre to the Cabinet

Well the trials have finished and amid all the fanfare, BT have officially launched their brand new FTTC service, providing up to 40Mbps down and up to 10Mbps up. Named BT Infinity (surely ironic) this promises to be quite a compelling offering for both domestic and business users hoping to adopt applications that require a large amount of bandwidth to be transferred across the last mile.

Now I’ll be honest in saying that I’m not the biggest fan of BT. However they deserve praise in being fairly quick to market with this. BT retail pricing seems competitive against the main competiton (being Virgin Media’s 50Mb service) whilst although geographic penetration is very limited, there are already over 100 enabled for the service, with quite a few exchanges planned for roll out. However saying that, there are still a few things that deeply concern me about the service.

Firstly it’s key to remember that essentially Infinity is a VDSL based service, meaning that BT will rely on their copper infrastructure from their local cabinets. This means that end user sync rates are still determined by the same factors that determine DSL. However even more important to note are their roll out plans for cabinets attached to exchanges, as even thought BT say they’re to enable a certain exchange for FTTC, it does not mean that they will enable all cabinets associated to that exchange. There are already stories of certain exchanges enabled where only half of the cabinets will be able to provide the service. Not good

Secondly it will be interesting to see how the underlying bandwidth is managed. It’s a well known fact that 21CN has been having some well documented congestion issues, and there is little doubt that Infinity will not help if BT can’t sort out the current issues that the’re already having. Infinity can only have a larger drain than the current access methods used. BT have gone some way to negate this being an issue, by deploying the same usage policies applied with thier ADSL2+ sericves. For the consumer, this has the added threat of reaching your limit faster than previously, due to having the ability to download a lot more.

Thirdly as expected, this will have very little impact on those in the not-spot areas around the country, as BT only plan to enable current market 3 exchanges. Therefore it won’t make major inroads into the USC set within the Digital Britain report. Further woe for those in rural areas.

However from my perspective, the main thing to take away from this is the fact that we are starting the process in moving away from copper in the last mile to fibre. This move will be painful for most, as we discuss the most viable ways to deploy it whilst making the end user propositions cost effective. However as it is used more and more within certain political party manifesto’s, it is sure to become a bigger plane for debate within various wide ranging communities. Hopefully this will mean more wide ranging action.

A look back on 2009

This is an article that I have written for print publication. Any feedback would be appreciated.

2009 has been a strange year for carriers providing last mile DSL access. Back in January in the midst of the recession there were worrying times being forecast for carriers as they struggled to get to grips with the financial downturn. With networks struggling to plug widening deficits, previously planned network expansion was put to one side, as capital was shunted to other areas seen as more important to stopping the rot.

At the turn of the year, there were 4 main wholesale DSL carriers: BT Wholesale, Cable and Wireless, the Carphone Warehouse Group and Tiscali. Due to the recession, BT Wholesale were stalling with the roll out of 21CN, Cable and Wireless were just re-entering the channel after a strategic exit only a few years back, Tiscali were involved in a very public tug-of-war between Sky, Vodafone and the Carphone Warehouse Group whilst the latter themselves had only just entered the wholesale market via their wholly owned subsidiary Opal Telecom. As the year progressed and we started to move towards a brighter financial climate, the industry took a marked turn for the better. Many people debate about the exact period when we started to look more optimistically at the future. However I believe that when Brown put the ball in the court of the Telco’s by stating that the infrastructure behind Digital Britain would spur growth in the economy, there was a paradigm shift, as the masses adopted what we had already realised; that telecommunications was a fundamental component to the kick-start of the British economy.

Throughout the course of the year, the broadband landscape has changed considerably. The main difference being the acquisition of Tiscali into the Carphone Warehouse group and their subsequent ambitious plans for 2010. Whether they will demonstrate the traditional pains of large scale acquisition traditionally felt by other large carriers such as Tiscali and C&W is yet to be seen. BT Wholesale has also started to gain traction with 21CN and in particular their WMBC offering. Cable and Wireless can also pat themselves on the back as having a fairly successful year, as they managed to win the Tesco contract, whilst deploying their much heralded MSP platform. However one of the big changes to the market has been the introduction of BE into the wholesale arena.

BE have always had a very compelling consumer offering; being the first to market with Annex M ADSL2+, whilst having one of the largest coverage areas of the tier 1 DSL networks. With a topology designed to underpin high bandwidth usage, they were setup from the onset to provide ADSL2+ to their subscribers. BE have entered in a very timely fashion. One of the key topics of the year has been the increased financial burden of bandwidth costs on service providers due to applications such as iPlayer and Pirate Bay. This has led to in depth debates including key industry and government personnel about how best to manage the use of bandwidth intensive applications. Solutions such as bandwidth caps, application charges and even application restrictions were mooted. Due to their mesh dark fibre-based VPLS core, BE can legitimately claim to provide solutions future-scaled to support the continued rise in bandwidth by end users. Also with a commercial model that alleviates central based usage charges, they’ve provided a low cost-of-entry into the ADSL2+ market for channel partners.

As we move into 2010, the wholesale broadband market is much changed from that of 12months prior. Both Carphone Warehouse and 21CN have ambitious growth targets planned for 2010. The latter introducing wholesale Ethernet-in-the-first-mile and fibre-to-the-cabinet trials. Many people have stated that the window of opportunity for new wholesale partners is fast closing due to this. However in my position, the consolidation in the industry has reached a natural plateau, with all the main DSL carriers now proving to be more mature in systems interface, product portfolio and commercial model used. Even BE as the new player can be seen to have an edge in some aspects of their proposition. By using ISAMs (Intelligent Service Access Managers) at the exchange with the capability of terminating Ethernet and seamlessly training the DSL to work at its optimum performance (known as seamless rate adaption) they have made the step to solidify their position as a force in the market both now and for the future. By also providing unparalleled visibility and control of their ISAMs to all service providers, they have allowed tecchies to fault find, diagnose and alleviate traditional 3rd line issues, which in turn has led to a vast reduction in the number of support tickets raised with them.

Even though this has been in the market for roughly 6months, already the features are proving compelling, even as compliment to a 21CN novation plan. With products such as bonded DSL and symmetrical DSL soon to be available from the port, they’ve positioned themselves as a prominent player in the next generation access sphere. Add into the mix backhaul capacity capable of supporting their lofty ambitions and the capital of their more illustrious parents, it’s no wonder BE are proving to be more than just an interesting alternative in the wholesale broadband market.

Will we be propping up BT?

Ofcom recently launched a review into whether they should raise Openreach wholesale pricing to compensate for BT’s burgeoning pension defecit, that currently stands at c.£9.4billion. We use Openreach for the metallic path to underpin our DSL in our direct channel, and in line with current gu-estimates, may be hit with a price raise of up to 4%. In the market, we’re not a big Openreach customer, but for the likes of Carphone Warehouse, Easynet et al, that 4% could be millions. Even worse is the prospect that Ofcom could raise this in line with further fluctuations with BT’s pension defecit.

Admittedly when comparing this with other industry regulators actions, this is no different. Ofgem actively police British Gas and include their pension defecits in their charges. The same goes for the respective watchdogs for the postal and water industries. However as Openreach is meant to be a private entity, this presents an intersting argument for it’s competitors. The harsh stance to take would be that due to BT’s poor management policies in allowing this debt to grow to such an insurmountable proportion, this is now having a direct effect on the rest of the industry. From my perspective, BT has always made a lot of noise about how they have been proactive in rectifying their defecit gap. Indeed in May, BT stated that they would make annual payments of £525million into their pension scheme over the course of 3 years. If this has to come directly from the competitors of BT then I’m sure there will be a few wry smiles about this prospect from within the BT tower.

The grubby world of exhibitions

It seems like we have entered the grubby season of the exhibition. I say grubby as some of the exhibitions I’ve been to previously have consisted of nothing more than a myriad of stands of vendors who don’t understand what you do, trying to sell you something that you inevitably don’t really need.

With the recent ‘Margin in Voice and Data expo’, there seemed to be a distinct change in direction towards a more focused show. I personally saw it as a good time for event organisers to re-evaluate their expos. However with the economy showing signs of picking up, there has been a return to the scene of the big all encompassing show stopping exhibition. Last week I went to the IP expo. Usually filled with big stands with big companies with even bigger egos. However this year was different. I only went for a morning on the first day, but what I found was an exhibition with a clear theme; Virtualisation. Previously where there were 4 expos centered around different aspects of cloud computing. This had now been amalgamated into one big show. Personally it was interesting to have a chat with different network operators, followed by walking across the room to discuss compatibility issues with specific vendors and system application developers. I found this a lot more worthwhile and was able to get a good level of understanding as to how different vendors/suppliers plan to incorporate a cloud based service into their product portfolios.

I then recently went to the ‘Convergence Summit South‘ run by Miles Publishing. This is specific to the channel within the telecomms industry and by their own admission has been their most successful summit for a while. As exhibitions go, it was exactly as expected. However the shining light of the expo was the seminars. Personally there was a great debate early on between Tim Hubbard of BT Wholesale, Neil McArthur of Talk Talk and Steve Gallagher of Cable and Wireless about what constitutes a ‘Next Generation Network’, and how their respective organisations are striving to compete. In my view, the term NGN is extremely mis-leading and one used purely for marketing spin. To see these industry heavyweights vying with each other about their own USP’s, whilst surveying the potential future landscape of the telecomms market was exciting, as little more than 5 years ago, BT would not have had to defend against such strong competition. The expo also saw an interesting feature, whereby hosted VOIP providers were given 20 minutes to setup from scratch their hosted platform in front of a packed audience. The one that I saw was successful and proved the ease of use and speed of the platform.

In all, expo’s can provide a valuable insight into your chosen market. Going back to the convergence summit, it was interesting to see how many big mobile carriers were present, as they tried to embrace the shift to FMC by traditional voice and data integrators. It’s a shame that the example set by the ‘Margin in Voice and Data’ expo earlier in the year was not followed, and I’m sure that as we emerge from the recession, various exhibitions will only continue to get bigger and probably more brash.

BT and O2 join up

Interesting news in the channel recently about how O2 have signed up with BT Wholesale to provide both fixed line data, broadband and consultancy services. On the surface this seems like a good opportunity for O2 to take a giant step into providing their client base with a converged solution based around their primary mobile offering. However one has to wonder why a comapny who has invested at the least £200 million on it’s own network would then make a further investment in providing a similar service based on another network.

The concept is sound. O2 have a massive mobile subscriber base, consisting of both consumers and businesses of all sizes. With their centre of excellences, they have one of the best support networks around for resellers of their products, to underpin their business offering. By offering their clients a unified solution consisting of business broadband seems like a sure fit. However, for one reason or another, this has never happened.

The acquisition of the Bethere network has enabled O2 to be a major player in the comms market. However so far, the market that has benefitted the most has been the residential market. This does not mean that the network cannot be used for businesses, just that so far, there have been few able to use it in this way. However with the advent of the wholesale channel, the network is now being used by business ISP’s as a primary offering to their client base, and is proving extremely successful in providing high bandwidth low latency services. As more exposure is given to this channel, it will be interesting to see how this is viewed by the powers that be in O2.

There’s nothing to say that a Be/O2 offering can’t co-exist with a BT service, as inevitably in the areas where Be don’t have an exchange unbundled, a rebadged BT service will be used. However, for my 2 pence, although BT Wholesale have persuaded O2 to sign a 5 year contract, I firmly believe that O2 will fully realise what an asset they have with the Be network, before we get anywhere near to the expiry date of their new contract with BT.

BT Openreach reacts to Digital Britain report

Warning: this post contains a large number of acronyms!

Interesting news this morning about how Openreach is reacting to the recent Digital Britian report in providing universal 2Mb broadband services. Using a method called Broadband Enabling Technology, or BET for short (yet another new acronym), Openreach proposes to provide a stable broadband service at distances of up to 12Km from a client’s nearest exchange. For premises situated within a current ‘not spot’ (thank the BBC for that term!) this could prove a viable alternative to using a mobile network or satellite operator, as having a fixed line broadband service would prove a lot more consistent, and also would not be as susceptible to enviromental conditions.

At first glance, it seems that BT have taken the idea of SDH and applied it to longer distances. Looking at the way this is depoyed, it seems that BT Openreach is extending the reach of it’s SHDSL services past the previous 5Km barrier. Currently there is little technical information about how they will do this, bar stating that they have made some “modifications and the use of a repeater unit”. However, it’s interesting that they’re using what was previously thought to be an end of life product, superseeded by both EFM and Annex-M, to provide services to the out of reach.

Since the Digital Britain report, there has been a lot of talk about how to provide a nationwide service capable of providing a universal 2Mb for a number of applications such as BBC’s iPlayer, VOIP and VOD to name but a few. Many different access methods, such as HSPA, WiMax and even satellite links have been considered in rural areas not deemed capable of obtaining a traditional fixed line ADSL service. In their various guises, they have provided a large amount of competition to fixed line operators whose coverage does not extend to ‘not spot’ areas. However these efforts have been largely independant to each other, and despite the advancements in technology within the fixed line communications sector, there hasn’t been a lot of options for people out of reach of their exchange. HSPA has proved not consistent enough, with users depending on mobile network coverage. With recent news of the Orange and T-Mobile merger, this could be something that may improve moving forward. Satellite broadband still does not have a large enough market penetration rate to be considered as a viable nationwide alternative. And WiMax is often used in backhauling bandwidth to out of reach areas, as opposed to a last mile access method.

By BT bringing this product into it’s portfolio it will go someway into giving it’s wholesale partners options to provide their ‘out of reach’ client base with a solid service for extensive use. With speeds of 1Mbps both down and up on a single copper pair, this is a positive step by BT in the right direction.

However, this also raises a lot of questions. All the marketing info we’ve been fed with relating to 21CN has previously made us aware that providing ADSL2+ from all of their exchanges was something BT were looking at having in place by 2012. It will be interesting to find out whether (should initial trials be successful) this may impact the rollout of Bt’s 21CN network. Also it will be interesting to find out the costs to the end user for this, as if it is using SHDSL technology, I couldn’t imagine the price point being markedly different to that previously. BT Openreach have admitted as much by stating “If there is funding to help meet the additional costs involved in deploying the technology, BET could offer a reliable and cost-effective solution to assist the Government’s ambition of delivering a minimum 2Mb/s service to virtually all UK homes”. Also, apart from throwing more copper pairs into the mix, it’s not really a scaleable solution for future bandwidth use.

All in all, it’s nice to see BT finally providing something that seems born out of market pressure. As mentioned, trials are being conducted currently. It will be even more interesting to see whether this proves both a commercial and technically sound option moving forward.


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