Superfast broadband will cost between £5bn and £29bn

17th September 2008

The Broadband Stakeholder Group, which advises the government on broadband issues, has published an analyst's report on how much it would cost to roll out superfast broadband using different network architectures.

The report assessed three different network architecture options: FTTC with VDSL, FTTH with GPON and FTTH with PTP.

The following is a short description of the three technologies, and there are figures below which provide more information.

• FTTC/VDSL (fibre-to-the-cabinet / very high speed DSL) - this consists of fibre-optic cable being laid as far as the roadside telecoms cabinets, then the broadband signal travels over the copper telephone wire like it does now for ADSL.
• FTTH/GPON (fibre-to-the-home / Gigabit passive optical network) - here, fibre-optic cable goes all the way into people's homes, but the bandwidth is shared by up to 32 users up to the roadside telecoms cabinets, from where dedicated fibre-optic cables go to people's homes
• FTTH/PTP (fibre-to-the-home / point-to-point) - this is the same as for FTTH/GPON but the bandwidth isn't shared between 32 households, so there's no contention for bandwidth

The speeds and overall cost needed to achieve nationwide coverage using these technologies were found to be:

The following figure shows how much it would cost to provide FTTC/VDSL to different levels of population coverage.

As BT has previously said it would spend £1.5 billion on rolling out superfast broadband to 40% of the population by 2012, and the graph below shows that £1.5 billion would only achieve around 43% population coverage using FTTC/VDSL, it's safe to assume that the vast majority of superfast broadband connections BT is willing to roll out will consist of FTTC/VDSL, and only the small lucky minority will be able to use the much faster FTTH.

The following figure shows the cost versus population coverage for the two technologies that use fibre-to-the-home:

The reason why rolling out FTTH is so expensive is shown in the following figure, which shows a breakdown of where the money goes, and you can see that for both of the FTTH options, civil costs account for the vast majority of the cost of rolling out the technologies. This is due to the fact that rolling out FTTH would involve digging up a lot of roads and pavements and so on in order to lay the fibre-optic cable all the way into people's homes. FTTC, on the other hand, only requires fibre to be laid from the telephone exchanges as far as the roadside telecoms cabinets,

The fact that the bulk of the cost of rolling out fibre-optic broadband is in civil costs is also the reason why people living in blocks of flats are more likely to get FTTH than people living in residential areas, because the cost of of laying the fibre can be shared amongst all of the households in a block of flats. This is one of the reasons why countries such as Japan, South Korea and Hong Kong, where most people live in blocks of flats, already have a lot of people on FTTH.

Network topologies

The following figures show the network topologies for the three different technologies:

FTTC/VDSL

FTTH/GPON

FTTH/PTP

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