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UK Superfast Broadband: Challenges and Opportunities

The UK government's stated ambition to offer the best superfast broadband services in Europe have been negatively impacted over the past six months, according to the latest market study by Point Topic.

The deployment of IP next-generation (IP-NGN) broadband technology by BT and alternative network service providers has lagged a long way behind the original plans. Furthermore, the adoption of these services -- where they are available -- has apparently been disappointing.

Research by Point Topic shows that its overall measure of broadband coverage has actually declined -- falling from 55 percent to 53 percent in the reporting period. Meanwhile, the number of customers subscribing to superfast broadband services has been below target in many areas.

Market Development Challenges

Point Topic believes that BT will catch up on its plans, over the next year or two, and they forecast that superfast broadband will be available to two-thirds of all the homes and businesses in the UK by the end of 2015.

Moreover, the forecast for superfast broadband lines in use by 2015 has been cut from 8.8 million to 6.7 million (note: these figures are for superfast broadband over existing telephone networks or new fiber infrastructure. They do not include superfast services over the Virgin Media cable network).

Tim Johnson, Chief Analyst at Point Topic, suggests that -- given these circumstances in the UK market -- community outreach and engagement initiatives, intended to provide awareness of superfast broadband benefits, can play a very important role.

Johnson said "Alternative networks are finding the going quite hard at the moment. They're in danger of being sidelined by BT and the big ISPs. But these initiatives could play a vital part in creating demand for superfast broadband to the great benefit of local communities."

The reasons for the setback are clear to Johnson. BT's rollout of next-gen access services reached only 182 exchanges by the end of 2010 -- rather than the 343 exchanges which had previously been forecast.

Johnson says that Fibrecity's ambitious plans to provide Bournemouth and Dundee with fiber-to-the-premises (FTTP) collapsed. Many more firmly-founded alternative networks (altnets) cut back on their own roll-out plans, faced with the economic realities of providing superfast broadband.

Market Development Opportunities

At the same time, experience with actual demand where services are available, or likely to be, showed the huge importance of community engagement initiatives that are intended to raise awareness and interest in superfast broadband.

As an example, the "Race to Infinity" competition, where people could vote to get BT's superfast broadband in their area, received an excellent response where there was a strong community campaign -- but little or nothing elsewhere.

Six BT exchange areas attained a 100 percent vote for having superfast, and a handful more over 60 percent, but this was a tiny proportion of the thousands of exchange areas concerned.

The same experience is being repeated in BT exchange areas where superfast services are already available. In areas where there is special interest for some reason, service adoption is high. In many more locations the level is rather disappointing, according to Johnson's assessment.

"This shows the key role which community initiatives have to play in getting the UK wired up to superfast broadband," Mr Johnson added. "Even if they never get to build an independent network they can prod BT into taking action and make them offer cheaper solutions. But it may be even more important that they turn people on to the benefits of superfast broadband, and get them interested in using it."

Strategic Significance of the East London Tech City

The focus is now on the British government's economic development leadership, particularly as it executes on the plan to make the East London Tech City project a showcase for the UK's role in the global networked economy. Access to superfast broadband is considered by local business stakeholders to be an essential ingredient of a digital economy strategy.
"Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make East London one of the world's great technology centres." - The Rt Hon. David Cameron MP, Prime Minister

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