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BT: ‘No room for 3rd broadband provider’

A third ultrafast network for the UK  to compete with BT Openreach and Virgin Media, is “highly unlikely”, says a report commissioned by BT for the regulator Ofcom

“A good long-term outcome would be to achieve fully competition between three or more networks for around 40 per cent of premises, with competition from two providers in many areas beyond that,” Ofcom said earlier this year.

BT’s report, byAnalysys Mason, said it would only be financially viable for a new entrant to deploy to 2m homes, or 7 per cent of the country, if it was achieving a market share of 25 per cent. If a “more realistic” outcome of a 20 per cent market share was achieved by the new operator, coverage would fall to a mere 4 per cent, using ducts and poles.

Ofcom said: “We know from discussions with major operators that there is significant interest in laying fibre using BT’s network. Progress is happening each week and smaller operators are building fibre networks in cities across the UK. The future is fibre and we expect BT to play its part in making that happen.”

The report will do little to end the debate about the state of Britain’s broadband network, given the calls from Sky, TalkTalk and Vodafone to break up BT on the basis this would increase investment in fully fibre networks that replace traditional copper lines. BT’s detractors argue that Britain is set to fall behind in the race to fibre-to-the-premise networks that offer speeds of up to 1Gb per second.

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