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Challenges Delivering Superfast Broadband Services

BT, the British telecom company, is facing a big challenge in 2011 -- delivering its new superfast broadband service, to at least half a million UK homes. Point Topic forecasts that the number of telephone lines carrying superfast broadband in the UK will leap from only about 45,000 today to over 600,000 by the end of the year.

"BT has to reach numbers like this to show that their investment in superfast broadband is credible," claims Tim Johnson, Chief Analyst at Point Topic. "They have to show both that the demand is there and that they have the technology to supply it. It’s going to be very exciting to see if they manage it."

If Point Topic is right, then only 3 percent of all broadband lines in the UK will be superfast, getting speeds of over 25Mbps -- using fibre-to-the-cabinet (FTTC) or fibre-to-the-premises (FTTP) by the end of 2011. Another 200,000 or so (about 1 percent) will be paying for the Virgin Media 50Mbps service over the cable TV provider's network.

Perhaps BT can achieve a big increase in its superfast rollout rate during 2011. BT Infinity was adding about 3,000 customers a week by October 2010 and new orders were running at 4,000 a week. It will need to average 9,000 new connections per week in the first half of 2011 and 14,000 in the second half to reach the total Point Topic has forecast.

"There are good reasons for thinking that can be done," says Johnson. The number of homes which BT Infinity can sell to will increase hugely, from about 600,000 in mid-2010 to over 6 million by end-2011. At the same time there are clear signs that BT Openreach has largely cracked the problems of delivering superfast broadband.

After a faltering start, reaching only 7,500 customers by the end of June 2010, according to Point Topic estimates, BT started to get its act together in the third quarter to reach 38,000 by 5 November.

"Our forecast is still very vulnerable to a wide range of potential problems," Johnson explains. "It could be hit by anything from the weather to a double-dip recession."

The key issue will be the sheer technical difficulty of keeping the process running smoothly while scaling it up to cover several times the current number of installations per week. But the rate of growth is within the range of what has been achieved with other broadband technologies in the past, notably DSL and local loop unbundling.

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