Fujitsu this week surprised the industry with the announcement that it plans to build an open access network based principally on fiber to the home (FTTH) technology in the UK. The company will partner with Cisco (NASDAQ: CSCO) on the network technology, while UK alternative service providers Virgin Media and TalkTalk have agreed to use the FTTH network, which Fujitsu says will reach as many as 5 million homes in rural parts of the UK.
When completed, the superfast FTTH network will support symmetrical 1-Gbps services to each customer. While Fujitsu has not provided details of the technology that will underpin the FTTH network, Cisco’s involvement strongly implies the use of an Ethernet point-to-point architecture. Cisco has provided equipment for similar open access networks across Europe.
The plan puts Fujitsu squarely in competition with BT Openreach, which itself has announced a superfast broadband initiative that will combine FTTH with fiber to the cabinet (FTTC; see "BT to trial gigabit FTTP broadband"). It should also be noted that Fujitsu said it would use FTTH “in the vast majority of areas,” which implies it will reserve the option to use FTTC as well. In a twist likely to gall BT, Fujitsu plans to leverage BT’s ducts and poles, which UK regulatory agency Ofcom recently ruled must be made available for competitive carriers (see "Ofcom: BT must share fiber, duct, and poles"). Both of the projects respond to a £530 million program the UK Government has launched to promote investment in superfast broadband in rural communities.
The Government quickly welcomed Fujitsu to the party. “I am delighted that Fujitsu along with Virgin Media, TalkTalk and Cisco share the Government's vision,” said Communication Minister Ed Vaizey. “The collaboration between these companies was exactly the sort of ambition and innovation the Government wanted to stimulate by removing barriers to broadband rollout. Fujitsu and their industry partners are pledging a substantial investment in the UK and it represents a deep commitment to the future success of this country.
While Virgin Media and TalkTalk will be the first users of the network, Fujitsu is hoping they won’t be the last. The company says it will provide access on a wholesale basis to other ISPs and service providers interested in extending their customer footprint.
Despite the big names involved, the project's success is not guaranteed, according to Ovum analyst Charlie Davies. In a column posted on Ovum's website, Davies called the proposal "one of the most ambitious and risky infrastructure ventures that the UK has seen in years."
Davies is particularly uncertain about the business case. "So far, there has been little insight into how Fujitsu came up with the £2bn figure that it expects the project to cost," he writes. "Its estimate works out to be £400 per home, which seems extremely low, even when its access to ducts and poles is taken into account. Typical deployment costs for FTTH deployments in less dense areas have ranged from €2,500 to €5,000 per house."