TalkTalk boss: Why is Britain so far behind with full fibre broadband?

The boss of one of Britain’s largest telecoms firms believes the country needs full fibre broadband now more than ever, thanks to the coronavirus pandemic.

With millions relying on the internet for work and entertainment during the lockdown period, demand is higher than ever before, creating a need for speedier connections.

Tristia Harrison – chief executive of TalkTalk since 2017 replacing Dido Harding – is calling for full fibre internet to be available to every home in Britain within the next few years. But is that really possible?

She told This is Money: ‘The genie is out of the demand bottle. We are never going back to 40 per cent less usage and we will continue to see even more usage over time. Does everyone need a 1GB of fibre tomorrow? No, but in the future they will.’

Tristia says Britain is way behind other European countries when it comes to fibre internet connection and the country urgently needs to catch-up.

She said: ‘Britain is still very significantly is behind Europe with full fibre. Effectively, we want a new fibre line to go to every home but this is certainly not happening a lot here. 

‘Meanwhile, 77 per cent of Spain’s population has fibre connection whilst 70 per cent of Portugal’s does.’

This compares to little more than 10 per cent of British homes, according to figures from Ofcom accurate as of September 2019.   

Why is Britain so far behind with fibre broadband?

Tristia adds: ‘For many years, there was no competition to BT, it was the only provider. 

‘But now there are alternatives and more competitive pricing and people want quicker internet speeds.

‘In an average household, there are 12 to 13 devices working at one time. Sometimes, there can be up to 20 so normal fibre is just not enough.’

Openreach, a division of BT, has dominated the broadband sector for many years and is the main firm installing fibre broadband. 

However, alternative fibre builders like Cityfibre and Gigaclear have grown in recent years, creating competition.

TalkTalk believes there is currently not enough pressure on Openreach to meet its commitments. 

It says that for too long it’s been largely left to Openreach to decide where to build. It means cities are more likely to get fibre, but outside cities it’s much less common.

Thirdly, regulation is an issue. Ofcom wants to increase the price of part-fibre, part-copper connections, which is what most of Britain is still on – the idea is then for this money to be used to boost full fibre connections.

The problem is that there is no mechanism that guarantees this increased price funds flows through into building fibre.

Installing the infrastructure needed for fibre broadband is expensive and time consuming. 

The Government would have to spend billions, having already allocated £5billion to tackle the ‘hardest to reach’ 20 per cent of British premises.

Internet usage of over 75s has increased by 50 per cent year on year, according to TalkTalk

Cost of full fibre 

One of the main concerns with installing full fibre is the cost but Harrison says keeping TalkTalk as affordable as possible is a priority.

‘With regards to full fibre, it is really important this isn’t for the chosen few or for the privileged. We have known that for a number of years but it has come into sharp focus during the pandemic.’

However, keeping the price of full fibre down will not be an easy task due to the amount of money it costs to install.

Full fibre broadband is also known as gigabit-capable broadband, meaning any technology that can deliver one gigabit per second.  

It is usually delivered by fibre to the premises (FTTP) technology. To have this installed involves replacing copper wires, that can often by 100 years old, with brand new fibre optic cables.

This will require digging up the old wires and replacing them with the new ones, something that is often a lengthy and expensive job.

A cheaper version, which around 95 per cent of households have, is fibre to the cabinet (FTTC) option which uses a faster fibre optic cable to the cabinet but then a copper cable from there to the house.

Meanwhile, some people still have the most basic broadband, ADSL (asymmetric digital subscriber line) which uses copper cables to a street-level cabinet or junction box and on to the house.

Internet demand 

But demand for more advanced internet is increasing and it is no longer just young people who rely on the internet, with usage by over 75s increasing 50 per cent annually, according to TalkTalk.

This age group are also the only demographic whose internet usage has continued to rise this year, as all others peaked in the middle of lockdown in April, suggesting they are adapting quickly to new digital-led lifestyles.

The average data consumption per person for over 75s is now over 50GB a month, the equivalent to streaming 71 hours of Netflix.

The increase in usage could well be the case as older people have been kept inside the longest during the pandemic.

There has also been a huge increase of people working from home, as the country went into lockdown, and as such TalkTalk – along with all other providers – have seen a massive surge in network usage.

Demand: More people are working from home now, leading to an increase in internet usage

One in six TalkTalk customers doubled their upload usage during lockdown as uploading is necessary for many work-related things like sending files via email or video calls

TalkTalk saw a mix of both people upgrading to fibre connections during lockdown, for faster speeds, but also those downgrading their plan as many lost their job and needed to save money where they can. 

Harrison said: ‘There are now more people on Microsoft Teams, Zoom and Google Hangout who need a speedy connection. 

‘We’ve also listened to doctors who are looking for better fibre when they are holding online consultations with customers.’

This continued even when lockdown eased with network activity still up by 40 per cent year-on-year through the first week of September.

When can households expect full fibre? 

Although having full fibre throughout Britain would have been beneficial during lockdown, the Government has said it is aiming for the whole of Britain to have access to it by 2025.

However, the cost of installing this and whether customers will actually pay up is a huge concern for broadband providers.

Harrison said: ‘This is a fantastic ambition but currently, we can’t build it, as we’re relying on 100 year copper wire. There is also no point building a new system if customers don’t join.

‘We’re working with builders to make sure prices are affordable as possible. Some customers are prepared to pay a tiny bit more each month but are not prepared to pay £20 to £30 more.

‘Collectively, we would like to keep pricing affordable, around £30 to £35 a month, for a very fast internet line. It might be a bit more than people are paying now. 

‘However, we can’t charge £60 or £70 a month from what we have seen and heard from customers.’ 

She believes customers need to be shown ‘how much easier’ things are with full fibre before millions of households will commit. 

So when does Tristia think that the UK can expect to have full fibre broadband?

She said: ‘Hopefully the UK will have it by 2025 but if not then, by the late 2020s. 

‘The introduction of full fibre across the country will not improve connectivity but also improve the number of jobs in this sector as there will be more call centre workers and builders. 

‘I hope by then we will be a much better served nation.’