Mike McTighe, chair of UK national fixed network builder Openreach, is determined that the firm should have its scope expanded to play a key role in supporting 5G. He told CommsDay that, given increasing mobile cannibalisation of fixed revenues, such a move would be “fundamental” to maintaining Openreach as viable. The comments have relevance for NBN who is considering its own place in the 5G world.
As McTighe’s presentation to the Global Broadband Futures event in Sydney made clear, there are many similarities between Openreach and NBN. While it is a separated entity broken off from incumbent BT rather than a new government-owned business, Openreach is a national wholesale-only provider selling services to downstream retail providers – and at different rates for different speed tiers.
It is on track to get ‘superfast’ broadband, which it defines as 25Mbps on the download, to 95% of the UK by the end of this year with a multi-technology mix of next-gen copper and fibre tech; it is aiming to move up to ‘ultrafast’ 100Mbps connectivity to 12 million homes by the end of 2020, using predominantly G.Fast along with a good portion of FTTP. And as with NBN, there are some key sensitivities around its business case – particularly if UK regulator Ofcom follows through with a push to regulate prices for the entry-level speed plans available on the Openreach network, potentially stunting demand for faster plans.
It is partly to boost that business case that McTighe is intent on ensuring Openreach is part of the 5G future as well as providing consumer fixed services. “We already provide backhaul to pretty much every tower in the UK… the issue for 5G is [providing fibre for] microcell architecture,” he said. “We want to provide that; it’s not currently within Openreach’s scope; I want to change the scope so that when we build down a street, we not only provision for the homes and businesses that we pass but we provision architecturally for whatever radioheads need to be built to support the microcell architecture. That will help our business case.”
But McTighe also cast the move as critical to secure Openreach’s future in the face of increasing fixed-mobile substitution. Speaking to CommsDay on the sidelines of the event, McTighe acknowledged that – as has been the case for NBN – there was “resistance in various quarters to the change of the scope of Openreach.” “[But] that will not stop me from pushing for that,” he said. “Because frankly, I think it’s more than just the point around making an incremental return; if you believe in the promise of 5G, I think it’s fundamental to maintain a viable Openreach!”
A veteran of the wireless scene himself, McTighe said it was “inevitable” that mobile would start to cannibalise fixed access revenues. “And if access is going to be cannibalised, then I’d better not be on the wrong side of that equation! So to maintain our position in the market, I think Openreach will have to offer technology-agnostic access products,” he said.
“It’s very generationally focused, but we already have [a situation where] 15% of UK households don’t have a fixed line. They only rely on mobile. It’s only going to get worse – so why would I only be on one end of that market? Somebody will have to slap me down very hard to stop me.”
Petroc Wilton