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Sunday, 13 November 2011

The True Cost of Britain's Copper Infrastructure II

Further to the previous post about the cost in lives as well as a wastage of £billions within the utility, transport and communications infrastructure sectors, there are yet further costs of the continuing existence of this copper to point out e.g. the effect on the mobile industry and every sector which uses that.

This blog post can be read at

Ebay have just commissioned a report by Verdict Research about the poverty of mobile coverage in the UK and hence its impact on m-commerce. Whilst we talk about spectrum frequently, one subject which requires far more coverage is the backhaul to mobile masts, especially in rural areas.

This backhaul is frequently supplied by costly and lengthy copper wires. As any business will tell you, overheads such as this can be a killer which seriously affects the bottom line of any business. Yes, the mobile operators make healthy profits, especially from very low cost and profitable services such as SMS, but high overheads do affect the appetite for investment, particularly in such a competitive environment as the mobile industry where there are far too many loss-leaders, mainly in order to prevent too much churn to competitors.

Ebay's research about m-commerce is telling, especially when you consider that in most cases, m-commerce requires solid access to data services in order to function properly.

The article summarising Ebay's research begins with this paragraph:

eBay on Friday warned that patchy mobile network coverage, slow connection speeds and poor reliability is costing the U.K. economy £1.29 billion per year in lost sales.

The article goes on to say:
"M-commerce sales are already worth some £1.35bn to the UK economy, and are set to grow fourteen-fold over the next ten years to £19.26 billion by 2021," said eBay. "It is therefore essential for Ofcom to seriously consider the interests of m-commerce when considering what regulatory approach to take towards mobile broadband provision."

It is time for Ofcom and the government to consider not just the availability of spectrum but also the associated middle mile costs that fall to the mobile operators. And AFAIK, the vast majority of wired mobile backhaul and longhaul comes from BT and is copper-based. (Correct me, anyone?)

What these statements from Ebay would appear to imply is that we are losing around half of the potential income EACH YEAR because of the poverty of the network.

Start adding together the costs from the previous article and this one, and we are getting into per annum revenue figures that make the total costs of ubiquitous FTTH deployment seem more than just affordable. FTTH starts to seem imperative for long-term savings and to assist an economic turnaround.

And we haven't started on public sector savings yet, or added in the savings to each household of true broadband access. Or the environmental savings which can be achieved by replacing costly, energy-hungry, and aged equipment required to run a copper network with modern, energy efficient, fibre kit.

I am undoubtedly getting myself into hot water with posts which protest the case, such as this, particularly amongst those for whom there is still an addiction to copper, but it all has to be said. Over and over again until the message gets across that we must do something, and we must start to JFDI now.

There is an article by Caitlin Moran entitled, "Protesters? They're beautiful!" in which she points out that protesters are not required to have answers, they are there to stand as a question mark asking, "What are you going to do about this?"

This is one such online protest, with a big fat question mark, to our policy makers, telcos, public sector, decision makers, purse holders, communities, citizens and businesses asking that very question.


Somerset said...

Profit from SMS? 10p for 160 bytes = £700/MB.

PhilT said...

Where fixed line backhaul is used it may be fibre or copper leased line and its likely to be provided by BT with their large footprint.

The market town BT exchange near me has the ends of several mobile backhaul microwave networks on its roof. The wire from the aerial will be coax and WGAS what happens after that be it fibre or copper. A Three base station on a grid pylon nearby is fibre fed and it then backhauls others by microwave. An O2 base has a 2M leased line into it from a local company's switchboard 10 moles away so that must be fibre.

Strikes me the mobile operators can build or rent sufficient connectivity by whatever means. Do they say otherwise?

Somerset said...

So what evidence is there that mobile base station connectivity is copper based? What sort of circuit do you think it is?

It's important to use verified facts in any discussion.