BT's Openreach business has confirmed plans to scale back its investment in Gfast as it focuses on the rollout of higher-speed all-fiber technology over the next two years.
Under its original plans, the network operator had aimed to extend Gfast to about 10 million premises by 2020. It now says the technology will be used to upgrade more than 5.5 million premises, implying a substantial reduction in the target.
Gfast works by extending the frequency range for broadband signals on last-mile copper networks. Because Openreach has always planned to install Gfast at street cabinets already served by fiber, the required investment should be a fraction of what it costs to extend fiber all the way to homes and offices.
But the scaling back is not surprising given Openreach's growing interest in using all-fiber technology to boost broadband connections. Earlier this year, the company said it would connect 3 million premises to all-fiber networks by the end of 2020, up from a previous commitment of 2 million. With favorable regulatory and investment conditions, it hopes to extend these all-fiber services to as many as 10 million premises by the mid-2020s. (See BT Edges Closer to All-Fiber Scheme for 10M Properties and Openreach Needs Fiber Partners for UK Rollout, Says Chairman.)
The operator has come under pressure from political authorities concerned the UK is falling behind other European countries like Spain and Portugal, where all-fiber networks are available to more than three quarters of the population.
"Full fiber's our priority and well accelerated our investment plans to reflect that," said an Openreach spokesperson in a statement emailed directly to Broadband World News. "Our engineers are already building FTTP to 10,000 premises each week and we're on track to reach 3 million homes and businesses by the end of 2020. Our ambition is to reach 10 million by the mid-2020s."
On the update to the Gfast plans, Openreach's spokesperson said: "We're keen to make ultrafast broadband available to as many people as possible, as quickly as possible. Gfast allows us to do that alongside our big full fiber build with little disruption to local communities, so we plan to upgrade more than 5.5 million premises using that technology."
Openreach has reportedly written to the retail broadband operators that use its network to inform them of the lower Gfast target. The UK's Financial Times (subscription required) newspaper says the letter -- a copy of which it managed to obtain -- indicates that Openreach will upgrade exactly 5.7 million lines to Gfast by the end of 2020.
Even with the commitment to extend all-fiber networks to 3 million premises, the new plan means fewer homes and businesses will receive a broadband upgrade by 2020 than under the original scheme.
The move away from Gfast is clearly bad news for specialists like Sckipio, which makes chipsets that are used in Gfast broadband equipment and has previously cited BT Group plc (NYSE: BT; London: BTA) as a Gfast pioneer in the service provider community.
During its recent earnings update, BT revealed that Gfast coverage had risen to more than 1.1 million premises at the end of June, up from just 84,000 a year earlier. Coverage of fiber-to-the-premises (FTTP) networks rose from 398,000 to 631,000 over the same period.
Openreach's "superfast" network, which is supposed to guarantee connection speeds of at least 24 Mbit/s, is now available to nearly 27.1 million homes and businesses throughout the country.
Speaking to analysts about FTTP rollout during a recent earnings call, Openreach CEO Clive Selley said: "We are completing 10,000 homes passed per week and achieving at the bottom end of our guided cost per home passed [of £300-400, or $386-515 at today's exchange rate]. It is a great start but we need to show we can achieve low build costs as we keep scaling and go to more cities. We need to see enablers for fiber build being cemented through the work of Ofcom and the government."
Openreach recently announced that it had chosen Finland's Nokia Corp. (NYSE: NOK) and China's Huawei Technologies Co. Ltd. as the two main equipment suppliers for its all-fiber build.
— Iain Morris, International Editor, Light Reading
