This automatically-generated transcript is taken from the IT Pro Podcast episode ‘The road to 10Gb broadband'. We apologise for any errors.
Rory Bathgate
Hi, I’m Rory Bathgate, and you’re listening to the IT Pro Podcast.
This week, we’re getting our daily dose of fibre.
Fibre broadband has become a priority in so many of our lives, and we all learned the importance of good internet during the long lockdown months of the pandemic.
Right now, fibre rollout in the UK seems to be continuing well, with 19.3 million (66% of UK homes) able to access gigabit-capable broadband and 9.6 million homes (33% of UK homes) now able to access full fibre according to Ofcom’s latest Connected Nations report.
But many communities, especially those in rural areas, are underserved by current networks, and some call for more power to be given to alternative network providers. Joining the show this week to discuss the UK’s broadband infrastructure, the future of the network and what businesses can seek to gain from it, is David Tomalin, Group Chief Technology Officer at CityFibre.
David, it’s a pleasure to have you on the show.
David Tomalin
Thanks very much, Rory for having me. It's a pleasure to be here.
Rory
Great. So just right off the bat, just to establish the kind of situation in the UK right now. How mature would you say the UK’s broadband infrastructure is right now?
David
Simply, it's not. We still lag many of the international indices for fibre deployment and fibre adoption in the market. However, I would say the work that CityFibre have done to invigorate that market over the last five years have moved us from the bottom and we're now accelerating up those league tables. So we're absolutely moving in the right direction, and we're moving quickly, which is the main thing
Rory
You say that CityFibre has been instrumental in spurring this change? This movement?
David
I think that CityFibre, with its mission for full fibre network encompassing all premises or properties or businesses in the UK, working with people like Vodafone, was instrumental in changing the foundation of the UK fibre market approximately five years ago. And that has invigorated competition in the marketplace. And hence why you see so much more broader fibre deployments by Openreach and by Virgin Media, and the plethora of other alternative network carriers across every breadth of the United Kingdom.
Rory
That term 'full fibre', that's a sticking point I know in the networking community. I was at Connected Britain this year, and I had the opportunity to see the CityFibre CEO Greg Mesch called for competitors to stop advertising fibre to the cabinet as 'fibre' or 'full fibre'. For those who don't know, what is the definition of 'full fibre?' And could you talk a bit about maybe why it's misleading to describe it as, to describe fibre to the cabinet as full fibre.
David
So for us, we focus on fibre from the central office, which is the exchange the data centre, where we bring the customer's traffic to meet the content providers, the service providers from that building through to the customer premise from the fibre that enters into their building, for full fibre must be fibre all the way. We appreciate that in the marketplace, people have different investment criterias, legacy networks they wish to support for as long as possible, generally copper based networks in those instances, and they try to minimise their investment, but maximise their return by maybe taking fibre from those data centres, exchanges to those active cabinets, those power cabinets and street. But that's almost like saying "I'm buying an electric car, but it's a hybrid. It's got a combustion engine in it." Is it, is it really an electric car? Or is an electric car completely electric? So we are on a mission that resets that definition, full fibre end-to-end.
Rory
It's all or nothing, in other words.
David
Absolutely.
Rory
So on that point, a lot of businesses will be weighing up the internet they currently have versus the internet that they could possibly invest in. Would you say that higher broadband speeds are really necessary for businesses seeking to invest in digital transformation, things like remote working?
David
I think there are two elements here that we need to consider. One, there is broadband speed, but there is also broadband reliability. And if you're a business, you actually need to to think about what is the reliability of a service to you to run on a daily basis. And all of our studies all of our reality that we see is, fibre based networks are inherently more reliable than copper based networks. So the first thing I'd have to pose to our listeners is, how important is it to you that that service works day in day out every moment of the day? So that's reliability. Now let's talk about broadband speeds, then. You don't necessarily know how valuable capacity is to you, until that constraint upon your business is unlocked. So very often in industries, what we see is by creating that uncapped potential, you see the businesses thrive in ways which was not envisioned by them before, when they were locked down to five megabits per second, two megabits per second, at a busy point of the day, or even 10 megabits per second. Industries change, they evolve, they realise they can do so much more, because we've unlocked that capability. So it's about envisioning the industries that we wish to grow in the United Kingdom over the next two, three, four, or five years. And the potential that gives each and every business owner and in fact home user, by moving to a fibre-based future.
Rory
That's great. I mean, I was going to follow up by asking if speed or bandwidth is the most important metric when looking at connectivity. But based on that, would you argue that it's kind of a blend?
David
It has absolutely a blend, it's to me, it's almost like standing on a seesaw. You're trying to balance the two things for your business. There's no point getting the highest bandwidth in the world, if it's not reliable. But equally, it's not worth getting a very reliable service, which gives you no bandwidth. So it's about balance. And it's about that balance within your commercial needs. So you might be, for example, a company who does drug development for pharmaceuticals. So the pharmaceutical industry, uploading masses of data, you need that network to have high capacity and reliability. But you may only need it in sporadic times of the day. But what you don't need is an unreliable service, and you absolutely don't need one more no bandwidth, where it's actually quicker for you to put that data on the hard drive and drive it to the end location. Okay, but that's different from where you're a small business owner, you're running a shop and you're doing transactions on your EPOS system. And every loss of a sale to you hits your bottom line. And at this point in time, if you're running those small businesses, you need to get that income stream secured, and ensure that it is always in place for you.
Rory
It is staggering that there are still businesses that, when they're weighing up transfer speeds, it's just a no brainer to still rely on physical transfer. And obviously there are air gapped systems, where that is sometimes seen as more necessary. But it sounds like what you're saying is, businesses currently don't, some of them don't have that choice. And they are being underserved in that way. If they're not actively seeking physical transfer, there absolutely should be a wireless transfer option. Well, sorry, internet transfer option, as opposed to physical transporting hard drives.
David
Yes, everything CityFibre does is focused on evolving the UK economy. And we're lucky enough to have the support to look over the five, ten, twenty-year period. So we've got to be transformational. And with that view, we hope by creating that framework and that environment, we can help the UK industries, from small startups to large scale conglomerates understand what their long term potential is by unlocking bandwidth as a constraint on their business. And you almost need to make a step changing your thinking about what your potential could be. So if you could have multi-gig services to your content distribution networks, and your development networks, well then workers who are currently constrained to office environments, where bandwidth is is so critical to their day-to day work — so for example, you might work in the oil industry, doing designs on geophysical calculations, all that high data intensity service type services — you know what, why can't we enable them to work from home? Why can't we empower that productivity gap, which let's face it as a UK economy, one of the biggest issues we have is productivity gap to our long term growth. So helping us as a community, and as businesses within that community understand that potential is absolutely key. But you can't just do it by focusing only on the now, you need to think about, well, how do I need to transform my business over the long term? How do I enable more productivity from my workforce? And how do I actually take on board the learnings of the last two, three years about work life balance, because it's not just about pure productivity, it's about retention of staff, the maximum engagement from your workforce to get the best outcomes for everyone, putting putting family first and putting your company as an enabler to you enjoying a balanced life. All those things come together into how you want to develop your business over the long term.
Rory
Enabling this kind of transformation, and then as you're saying, linking it so so closely to UK productivity, really highlights how fibre is so intrinsically linked to things like UK GDP, overall worker happiness?
David
Yes, absolutely, worker happiness is absolutely fundamental. We see at the moment, across the industry, high churn rates as we've come out of the COVID constraints, and people are working, looking for that more balanced working life environment. And that's, there's not nothing wrong with that, but it's about us embracing it as a country, as a community of industries. Because we absolutely have to close that UK productivity gap. That's the only way we are going to be successful in the modern world.
Rory
So with all that in mind, in a sort of general sense, what are some of the main hurdles that are holding back fibre rollout in the UK right now?
David
Probably the single biggest challenge is, is gaining scale, I think our learnings from the last three to five years, has been to go from a company of 150 people to approximately 2,000 individuals. And in that growth curve, also helping our key partners primarily in the build, construction, fibre termination industries, scale their businesses through Brexit, through COVID. Until we've now reached a sustainable run rate of premises past per year, and that will continue to be a constraint on the ability of us to maximise fibre rollout. There is only so many construction companies, only construction workers, especially when we see this scenario in the UK workforce of relatively high employment, and relatively free labour workforce to undertake these types of construction and build type roles. So there is that constraint there, but as an entity, I think we've reached this sustainable level for CityFibre that helps us power forward for the next three, five years to get to the 8 million target of homes passed. Now, there are other elements that have been an output of the COVID era, as we could call it, as we look back in many years time and probably relate to it, supply chain challenges that we've seen across the board for chipset, manufacturer, etc. But an awful lot of those are now also coming to an end. It has required strong partnership relationships across the industry. But you see that, that reality has set in we've started to get working principles over long-term forecasts working through supply chains getting security, and it's the willingness to face into the challenges together, as a partnership of companies with an end goal and fibre enabling the UK that has effectively enable us to reach the success we have so far.
Rory
Would you say that this this relationship, you're talking about, being able to very closely talk to partners tend to their individual needs, would you say that being in the position of — I don't know if you would describe yourself as an alt-net, but what some would describe as an alt-net not provider, Do you think that's been a benefit? That being in this period of growth, I think I'm correct in saying that you've reached a quarter now, 2 million of the 8 million targets —
David
So we've absolutely passed 2 million premises, just recently announced I think it just for Connected Britain.
Rory
Right. Exactly. Would you say that this has put you in a position where you're able to more closely talk to partners than say, some of the competitors such as Openreach?
David
I think that, culturally, we have always tried to be a partnership with community. Since the early days of CityFibre are working with key councils, I mean, we've had a huge relationship over the years with Coventry City Council who've been incredibly supportive of our, of our journey, as a business, as we provided services to them fibre-based services to them, as they've transformed the city of Coventry. And that, that inherent DNA of who we are, as a business has helped support us across all our partnerships, be they with suppliers, or be they with customers. It's, it's a cultural value that we I think we hold dear. And you're able to do that as you're growing a business, it's very easy as you become a mature business to lose that, that feeling of care and relationship and partnerships. And we've had the benefit of of growing with the community in the UK, building these fibre infrastructure. And that's why, frankly, right now, we are the second national fibre infrastructure provider. And that's the place we intend to stay. And it'd be lovely to be first. But, you know, that may take another five to 10 years.
Rory
Well, looking at the state of providers in the UK, do you think there's enough competition in the market right now? I mean, I realised I'm asking you if you prefer more competitors, but is the market competitive enough?
David
So I think that the market is never competitive enough. We, again, it goes back to what is in our DNA: our DNA is to be a competitor. Why are we successful? It's because we are competitive, but we need to keep our edge. And the only way that we can keep our edge is having other competitors in the market to keep up that creative tension. And I would then say that that should apply to the users of our service. All industries should be competitive, don't get complacent, become creative, push the boundaries. Because only that way we will achieve the maximum we can. Because if there isn't a competition, it's so easy to sit back on your previous success, and, and lose out in this modern, quite frankly, incredibly competitive world.
Rory
Something that the government has, they've revised their target several times, but they're more generally talked about gigabit broadband. It was originally a manifesto commitment, which has been sort of pushed back again and again now to 2030. But when are we likely do you think to see, as an example, 10 gigabit broadband speeds becoming widely available for businesses?
David
I think businesses and residential, what we see is the business and residential market are closely converging in their wants and needs. To the point of which I would say the residential products we provide now are very much like the business products you were seeing five years ago. And time is only likely to bring those together. Because working from home is is often not necessarily a choice anymore, it's a part of how you live. So you need that sort of reliance, reliability and capacity. In regards to 10 gigabit, what we're rolling out is we're rolling out a technology called XGS-PON, which is a 10 gigabit PON. And that enables what we're calling 'multi-gig services', and multi gig services are where a customer can have one gig, two gig, five gig and so on and so forth. There is an easy challenge to make here, which is because we are providing a 10 gig PON, does it actually provide a 10 gigabit per second service? It's slightly less than that. Because there are certain allocations, you have to put in that service for committed information rates or committed bandwidth to each and every customer. There's overheads with distance, etc. But introducing multi-gig services — that one, two, and five gig — is imminent. It is something that we are moving in the market. We're trying to be competitive in space across the whole of the national footprint over the next year or so, and the challenge will then become the innovation impact that has on ISPs. So we provide services for the ISPs. Well now, the ISPs need to do multi gig residential broadband hubs. Is your PC 10 gig capable? Is it two gig capable? And we're carefully watching this market: it is an innovation market. There are going to be leading contenders who can push on the boundaries of how you can use the services. But jump five years from now, I think it will be ubiquitous. That term five gig services will be standard across residential platforms across the UK.
Rory
Would you say... I know you said that the sort of lead time if you like between business and residential is narrowing and narrowing. Would you say that businesses are still likely to see multi-gig services slightly before residential? Or can we expect these around the same time you said —
David
So we, yeah business services, we'll see them quite frankly, I think they'll see them predominant about the same time. Because the technology adoption for residential is actually, enthusing that market to service the business market. One of the classic reasons why are we able to move to XGS-PON now so quickly in the marketplace, compared to where we thought it was going to be five years ago, is because there's massive residential network build-outs for XGS-PON globally, that has brought down the manufacturing price point, okay, it's all about those manufacturing dynamics, high volume, commodity components. Those elements have come down in price, meaning, you know what? It's relatively easy now to move to residential multi-gig services, and business multi-gig services, with those business multi-gig services, more orientated towards modern SLAs price points and dynamics than if we'd gone with a traditional lineup of products based on traditional technologies, point to point fibres, etc. They would have, they would have cost more and been therefore available to less of the business market.
Rory
So this is also something that small/medium businesses, SMEs, can benefit from, it's not just for the larger enterprises.
David
Absolutely. This has got to be empowering our broad wave of business community in the UK, it can't just be for one or two of the larger entities. Now, the question that comes with a full fibre network, where your fibre is enabled to all entities, is what potential does that give to the larger businesses? Why stop at 10 gig? Why not have 100 gig or even an 800 gig terminated service? There is, that's the beauty of a full fibre network, you're not constrained by copper in any part of the network architecture. So all those potential long range services start to come to the fore.
Rory
So once you've got the infrastructure there, it's really just a stepping up point, where you can keep expanding the speeds, the bandwidth, really to user need.
David
Absolutely. So even in the residential market, as we look at that over the next 20 years, we've gone G-PON, that's two and a half gig effectively down, one and a little bit up. Then we've got XGS-PON, which is 10 gig symmetrical, then there's a decision that the industry needs to make between 25 gig and 50 gig PON. We generally think at this point in time, we will move to 50 gig PON, round about 10 to 14 years from now, is our current thinking. But industry changes quickly, if the potential changes, we will reflect on that. And those step changes work across technology. And we will bring them to the market based on our own competitive pressure, based upon the business need of the UK community, based on government direction, all those things come into the melting pot to create that truly innovative service layer that businesses can rely on and residential users can build on.
Rory
Great. Are there any changes that businesses should be making to their current infrastructure in order to prep for this, to really take advantage of 10 gigabits and above when, when it's available?
David
I think the fundamental one is, if you're building out your business network in your office, 10 gig capable devices, start thinking about them, start prioritising them. I mean, it's clear we're in an economic environment that requires you to focus on the right investment. Spend that little bit more time going well, you know what, the backup storage server on site versus the cloud based storage service that does need to be 10 gig. Whereas my PC can be a two gig. Wi-Fi compliant, if I'm moving to the new Wi-Fi hubs, then move to the two gig capable Wi-Fi solutions. All those elements come together to enable you to have that longer, kind of return on investment on that infrastructure spend that you need to make as a business.
Rory
And for businesses, I mentioned in the intro briefly, rural businesses, I know that a lot of rural areas are still served primarily by copper, are these immediate benefits experienced by areas where new lines are being laid, or existing fibre is being upgraded? And will the existing copper lines, can they expect a delay, rural businesses, when it comes to rural communities?
David
We as the alternate carrier sector, need to understand which of our businesses, which businesses serve those communities the best. There's some fantastic examples of local businesses and rural communities getting together to help serve themselves. So can we as a, as a industry support their capability to move to these types of services. Now, that might be not necessarily for us to build them. But it may be for us as we build out our networks, to provide connectivity to them so they can connect to the internet. So all those things need to, to come into a web of the potential of enabling rural locations. Now, I appreciate the government, I think, are supporting a whole number of initiatives to enable rural communities. And, again, it's going to come down to in the end to building out at scale, can we, as an industry, make sure that we have in our plans, the timelines to enable those communities so they are not left behind? If we can do them with urban builds, then let's do so. And it's the efficiency of serving all, rather than being focused only on a few. I think our story has always been about the potential that we can bring to the market. And I think we have to work with that wider body of alternative infrastructure providers, and industry and government to ensure that no community is left behind.
Rory
Fantastic. This is more of a broad point. But kind of in summary, you'd say that in the next 10 years, the UK can look forward to this initial, this rollout of infrastructure, which will then allow the next 20, 30 years of UK networking to really be "the sky's the limit", in terms of expansion?
David
I think in summary, I will say this, which is: we have got the potential to ensure that the telecoms infrastructure in the UK is no longer the constraint upon our society. The investment that we're putting in the technology that it enables, should unlock a potential of opportunity for everyone, in every walk of life, to endeavour to their maximum potential as an individual, and as a business. And I think that is transformational, compared to any other time over the last two or three decades in the telecoms history of the UK.
Rory
Just to clarify, as it stands, does copper fit into your strategy?
David
It fits into our strategy in regards that it is a legacy technology that constrains our competitors in the market. We are a fibre only company. We are lucky not to be constrained by copper based networks, in the activities we undertake. And that's a real opportunity for us. We're very clear on that position.
Rory
Broadly, where do you see CityFibre In five years time?
David
I think we're going to build on where we already are, which is we are the UK's largest independent, open access fibre-only network. And, and we're going to pass 8 million homes but we've got to build on that, we've got to enable that alternate carrier community to possibly come together to maximise the footprint, really create that creative tension, that competition that you spoke about. And I think we're well positioned to help orchestrate those changes to the UK economy.
Rory
David, thank you very much.
David
Thank you very much, Rory.
Rory
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