Rajiv Datta, CEO nexfibre
What is build density?
As various network operators outline their build achievements, it is important to recognise that all build is not the same. A key, but often overlooked part of network infrastructure, is build density. Put simply, it is the fibre coverage of premises within a postcode area, in other words; how completely does a network serve an area?
Why is this important to ISPs?
ISPs are increasingly noting that build density is an important crucial factor when selecting a wholesale network provider. According to a recent poll of members of the Internet Service Providers’ Association (ISPA), commissioned by nexfibre, 40% cited a lack of build density as one of their most impactful recurring pain points with network providers.
So, what are the benefits for ISPs?
The financial benefit
A dense network means more potential customers within a given geographical area. From a financial perspective, this means:
With more premises to target, localised marketing activity becomes more efficient, and presents a greater potential return on investment.
Time and costs for service provision and maintenance are lower, the benefits of which are felt by ISPs.
And in a market which is fiercely competitive, the benefit of having one infrastructure provider to cover an area, rather than having to integrate and work with multiple to achieve coverage, shouldn’t be overlooked. For ISPs, this is much simpler and more cost-effective.
Customer retention
While exact figures aren’t typically published by operators, industry reports suggest that moving home is one of the top reasons for broadband cancellations in the UK (source: thinkbroadband.com).
Over 68% of house moves are within the same postcode area, and 34% in the same postcode district according to Consumer Data Research Centre data (source: cdrc.ac.uk), meaning that choosing a provider with greater coverage reduces the risk of churn for ISPs.
What contributes to low build density?
Investment pressures
Many operators are under pressure to minimise capital spending, and are on very tight budgets. Physical Infrastructure Access (PIA) is widely used across the industry, leveraging pre-existing ducts and poles from the incumbent, to lower the cost of build and speed up roll-out. However, there is a range of costs associated with deploying network using PIA, depending on its availability, blocked ducts etc.
In order to achieve the lowest Cost Per Premise (CPP), some network builders are only using the easiest-to-deploy PIA infrastructure, to keep their capital expenditure as low as possible, and demonstrate the fastest progress of network expansion.
While this creates a façade of national-scale coverage, the reality is more like ‘swiss-cheese’, leaving many properties disconnected and left behind, and often costs more in the long run to go back and ‘fill the gaps’.
Permissions and rights of access
Network density is also a key tool in addressing “not-spots”. These are persistent areas where homes and businesses remain underserved despite being close to well-connected areas. Surprisingly, these are not restricted to rural areas, but also found in urban areas.
In addition to the challenges listed above on cost and availability, gaining permissions from landlords or property owners is difficult and lengthy, making it challenging to upgrade from existing copper infrastructure, particularly in relation to multi-dwelling units (MDUs).
The UK Government’s long-awaited proposal for amends to renters’ rights has high expectations, and a significant role to play in meeting the 100% full fibre coverage target by 2030.
Our approach
Closing the gaps, and the digital divide
At nexfibre, our approach is to build a network for the long term, and provide the much-needed sustainable competition to the incumbent.
In conjunction with Virgin Media O2, our postcode coverage averages at 80%, one of the highest in the industry. This is central to our drive for more homes and businesses to gain access to high-speed full fibre broadband, and is essential for building a robust and inclusive network that serves all parts of the UK – not just the most accessible or profitable ones.
Ultimately, a dense network that provides for all communities, including those that have typically been underserved, is a key underpinning of the UK’s ambition for growth and innovation in every sector.
Fibre fit for the future
nexfibre, as a wholesale only provider, can focus entirely on providing a high quality, technologically advanced full fibre platform for ISPs and businesses alike.
With our high build density, XGS-PON network, capable of speeds up to 10Gbps, and national-scale footprint in collaboration with our partner Virgin Media O2, we provide a genuine future-proof alternative to Openreach, driving sustainable, nationwide competition.