Openreach and BT better watch out for... CityFibre after surprise £537m takeover deal

Broadband minnow CityFibre's acquisition by Connect Infrastructure Bidco for a staggering £537m has positioned it centre stage to take on industry goliath BT/Openreach, company director Mark Collins has said. In a surprise move, CityFibre this week announced it is being bought out by infrastructure investment funds – Antin …

[IneptAdept]

But But..... Openreach is not BT

Obviously this is bullshit.....

Openreach have been in a monopolistic position for too long and as such have moved at a glacial pace.

Now they will become very worried, if CityFibre can get some of them government funds for fibre what will Openreach do....

As stated above supposedly BT doesn't affect Openreach as they are separate entities......

[Steve Davies 3]

Re: But But..... Openreach is not BT

Perhaps the owner of Fulham Football Club has mistaken Wembley for BT?

I'm sure he'd get a better reaction to taking over BT than he got for wanting to buy a stadium.

[Gordan]

Overbuild BS

"Providers could end up targeting the same lucrative areas to invest in fibre, rather than creating a more geographical spread."

It is a GOOD thing that they are all targeting the same areas. It means there will be competition wherever it is available, forcing providers to ensure they are providing a good quality service at a competitive price. Once they cannot take the piss by charging sky-high prices (anyone seen FTTPOD prices recently?), they will have to spread further and further out from cherry picked areas in search of more revenue.

Overbuild is exactly what is supposed to happen, and it is a good thing.

[Anonymous Coward]

Re: Overbuild BS

"forcing providers to ensure they are providing a good quality service at a competitive price."

So a race to the bottom, then.

"Once they cannot take the piss by charging sky-high prices (anyone seen FTTPOD prices recently?), "

OR have seen the light one that one - the post-February pricing structure seems reasonable given that it is a bespoke engineering effort, and this time it actually tries to account your neighbours piggybacking off of your investment. Openreach's normal FTTC and FTTP pricing isn't that bad.

The grass isn't always greener - IIRC, those in state-funded altnet areas have to cough up the full for the final run into their premises (or DIY it). No fixed price installs such as those in areas with Openreach FTTP.

"Overbuild is exactly what is supposed to happen, and it is a good thing."

It's a classic natural monopoly and it isn't necessarily a good thing. Consumer broadband is a low margin game. What we have today works because ISPs can rent infrastructure at a low cost per user with corresponding low risk.

Overbuilding introduces a very high cost of entry, poor returns. Numerous altnet companies have been put out of business as soon as Openreach / BT up their game. Most notable recent casualty is Digital Region, who built an FTTC network in parts of Yorkshire - council funded thing. No notable ISPs used the network, prices were higher than their Openreach counterparts. Openreach ended up extending their FTTC network to those locations after the company folded.

The mobile networks went down this path - the end result is poor, patchy coverage. It's now improving as Vodafone/O2 and 3/EE have pooled resources (and of course Orange and T-Mobile merged completely!)

We don't have multiple electricity, water or gas networks for the same reason.

[Gordan]

Re: Overbuild BS

@AC:

Are you actually arguing that monopolies and cartels are a good thing, and actual market competition is a bad thing?

[SiFly]

Sigh .....

No sign of any movement of actual FTTP from anyone anywhere, just marketing BS. If BT^H^HOpenReach have plans to reach 20% of UK housholds by 2020 they only have 19 months to do it

[IneptAdept]

Re: Sigh .....

I think we all know the only plans they have is for us as the public to fund it and for them to reap the rewards.....

This is why they should still be owned by us rather than investors.

[AndrueC]

Re: Sigh .....

This is why they should still be owned by us rather than investors.

Except that when they were owned by 'us' under the guise of the PO the network was starved of investment and almost run into the ground. For sure BT group has its problems but the network is far more reliable, reaches more people and is cheaper than it was under public ownership.

There might be a better way of running a national data/telephony network but I can assure you that public ownership is not it. It's been tried. It failed (or nearly did).

[IneptAdept]

Re: Sigh .....

Ok no your right, the issue is it wasnt sold off to multiple parties it was just handed everything and left to get on with it, without the oversight that a government body may of had.

Maybe we have had more advances but I have also seen them just become a fat monopoly with no reason to do anything, that was until Local Loop Unbundling come along and they actually realised they had to compete.....

So maybe if that had been done in the beginning we would of had a quicker realisation of network increases in both capacity and reliability

[Doctor Syntax]

Re: Sigh .....

"it wasnt sold off to multiple parties it was just handed everything and left to get on with it"

Unlike the railways where the train operating companies had to run over someone else's rails.

[jabuzz]

Re: Sigh .....

The problem with BT or more precisely the telephone network when it was operated by the Post Office is that is was undergoing a massive expansion. That is hundreds of thousands of lines where being added every year for best part of two decades. By the time BT was privatised all that had more or less ground to a halt and the old electromechanical exchanges where already in the process of being replaced with shiny SystemX ones, which improved the reliability of the system. All of this would have happened regardless of whether the it was privatised or not.

The real villain is actually Rupert Murdoch. BT offered back in 1997/98 time frame to fibre up the whole nation if only it could get out of the restriction of doing TV early. Murdoch was able to persuade the Labour government that this was not the best option. One can only hope that one day he gets lynched for that.

[Doctor Syntax]

Re: Sigh .....

"BT offered back in 1997/98 time frame to fibre up the whole nation if only it could get out of the restriction of doing TV early."

Look back earlier than that to when cable franchises were handed out but BT was excluded as a matter of policy. The cable cable companies cherry-picked than and no doubt this current development will simply represent more competition in the cherry-picking industry.

[Steve Davies 3]

Re: Sigh .....

Except that when they were owned by 'us' under the guise of the PO the network was starved of investment and almost run into the ground.

The starving of investment was down to government policy. The same applied to all other nationalised industries. The GPO (like BR etc) could not borrow even 1p without permission from the treasury mandarins.

[TrumpSlurp the Troll]

Re: Sigh .....No sign of any movement of actual FTTP from anyone anywhere,

Really?

Then all the telephone poles around here aren't sprouting loops of fibre which are being pulled into underground ducts and jointed? There are no black blocks of fibre terminations at the top of each pole? I will wake up and find it was all a dream?

Granted that it is perhaps a strange area to be rolling out FTTP when we already have FTTC and VM cable but this really is happening.

Someone somewhere.

[Anonymous Coward]

Don't think they'll be too worried. The "altnets" are just as good at press releases as Openreach are - and you can be sure that they won't ever touch anywhere remotely difficult, whereas Openreach will... eventually.

Lots of companies have blustered and promised that they'll compete with BT (as it was) or Openreach - all have failed. The cable companies couldn't make a go of it, even though their network was technically better and they had the advantage that BT were banned from offering a TV service.

The whole thing does seem like a repeat of the Royal Mail fiasco - Ofcom has decided that a natural monopoly can actually be competitive. Even CityFibre won't be making much money if Openreach, Virgin, Gigaclear and countless others decide to fibre up the same streets.

[silks]

OpenBreach Competition

Such a shame if BT OpenBreach actually had some decent competition...

[Tom 7]

Re: OpenBreach Competition

Went to a council meeting last week and it looks as if we're getting some wireless broadband by the end of the year 30Mb apparently. What is interesting is BT didnt even bother to bid for the public money available - which given openretch has already laid the fibre on the quiet is a bit strange. However it looks like decent (?) BB is now available to pretty much all of the farmers etc living outside of the villages which got FTTC upgrade a year or so ago and went from very fast ADSL to not much faster FTTC. Only one business went for the 70Mb option from what I hear.

I think the new wireless BB will more than double the properties with fast broadband at considerably less cost than BT/Openreach not really speeding anything up for their FTTC setup.

I might see if I can get some of the wireless modules for PTP stuff with some neighbours!

[anothercynic]

Excellent...

About time someone does something about this something-poly... ;-)

[TheManCalledStan]

Openreach still have the obligation of maintaining copper... OFCOM please man up and say to everyone plan for it's demise... so Openreach have more of an ambitious plan for FTTP and LLU ISPs the game is up don't object to copper withdrawl...

[Anonymous Coward]

CityFibre appear to be threatening action if Ofcom allow Openreach to forcibly move copper users onto FTTP. I think they have a rather distorted idea of what state aid means, but it surely doesn't extend to "sensible network management practices" and "private sector company decommissions surplus assets".

https://www.telegraph.co.uk/business/2018/02/01/bt-openreachto-extend-ultrafast-fibre-broadband-three-million/

For a company that talks a big game, they seem to be angered by the idea that legacy operators should be permitted to close down legacy networks as a condition of building their replacements! Quite perverse.

[jacobbe]

CityFibre will just cherry pick the lucrative customers. Clue is in the name.... If you dont have Fibre available in your area, dont hold your breadth.

[Anonymous Coward]

Take on Openreach?

So they are going to rollout a nationwide service like Openreach have (be that fttp, FTC, adsl)? What’s that? No? Then cut the bullshit.

[low_resolution_foxxes]

Hmm. BT have a nationwide fibre network no? Capable of 330mbs over the final copper wires from the street cabinet?

Sure full fibre is great for apartments and new build, but the retrofit cost is quite high when the existing solution works great for ~80% of the population. It looks like mobile 4g dingles mounted on the roof are the way forward

[Anonymous Coward]

If CityFibre were to lead a community led initiative in rural areas...

If CityFibre were to lead a community led initiative in rural areas where locals dig the cables in, but City Fibre provide the expertise/switches/backhaul, the BT drunk sitting on it's hands, "blocking the pub doorway" (so to speak) might sober up pretty quick.

The model used could even copy BT and treat it as a competition like BT did back in the day with ADSL, to target those areas with the community willpower to make it happen.

A CityFibre / B4RN style rural partnership? It has legs. (With a percentage of revenue paid back to the community, once live, once income from connections is being generated).

Even if it was just a couple of pilot areas to start with, it would be fantastic PR for CityFibre, aswell as boosting those rural areas, removing them from the stranglehold of BT's legacy copper carcass.

BT have lied about vapourware Pointless G.fast for several years now (in terms of rural communities), saying it was their preferred solution, when they knew full well it would never be cost effective in these locations, and is a can of worms to fault find.

It's all just being delaying tactics and bullshit marketing, their typical "wait for handouts" approach.

[Elmer Phud]

Again?

"it also raises the possibility of over-build issues. Providers could end up targeting the same lucrative areas "

Ah, like the huge cock-up with cable TV.

I can get several cable firms but no BT fibre on my side of the street -- FTTP -pole not premises.

[Dr Gerard Bulger]

Everyone goes on about lack of hi-speed in the countryside. It's inner cities and those living in blocks built before 2010 that have issues and nobody mentions it. All suppliers can only over 6-7mbs here in a small block of flats in EC1 Central London. So we use a 4G service. I cannot find any supplier that offers fibre to the block, then using the copper within the building. There are those offering to set fibre to earch door in building but expensive and a locked down single contract. Let's hope CityFibre lives up to its name and offers decent speeds for City dwelllers, most live in blocks.

[TomS_]

Slow clap

to all of the marketing managers that bastardised the term "fibre", and now have to refer to *actual fibre* as "full fibre".

Slow clap indeed.