The cost of equipping the UK with next generation broadband could reach as much as £29 billion.
The figure was estimated by industry body the Broadband Stakeholder Group, and revealed in a report published today. The BSG warned that the high cost meant rural areas risked missing out on the technology.
The report, called 'The costs of deploying fibre-based next-generation broadband infrastructure' and conducted by research firm Analysys Mason, highlighted two key methods that could be used to connect UK properties to an ultra high speed network.
The faster technology, called ‘fibre to the home’, would provide download speeds of up to 1 gigabit per second, but would cost £28.8 billion and involve digging up roads to lay fibre between telephone exchanges and properties.
In contrast, ‘fibre to the cabinet’ would cost £5.1 billion and would provide speeds of 30 to 100 megabits per second, significantly slower than the first solution but a great improvement on current speeds. It would involve running fibre from the exchange to local cabinets on street corners only, rather than all the way to homes.
Whilst the second type of technology was likely to become predominant, it would still cost three to four times what telecoms firms had spent on existing broadband technology, according to the BSG.
The report also said the high cost of investment, particularly in order to reach buildings in rural areas, meant telecoms firms would avoid updating infrastructure in sparsely populated zones. In those cases, affecting up to a third of the population, there would be no change because operators could not guarantee a sufficient financial return, the BSG said.
Nevertheless, Antony Walker, chief executive at the group, said the report “does shed light on how some of these costs can be reduced and what the likely extent of commercial rollout will be”. It should “focus minds” of the industry and government, he said.
Cost reductions, the BSG suggested, could come from the reuse of existing telecoms ducts, the sharing of infrastructure owned by other utilities including water companies, and even the use of overhead fibre distribution in some areas.
In July, the Communications Management Association urged the government to take action over slow broadband speeds, which it assessed as threatening the efficiency of British businesses. Over one third of its members had said they wanted speeds of at least 100 megabits per second.