UK Intelligence Committee blasts BT for not notifying ministers of use of Huawei equipment

The UK Intelligence and Security Committee has criticised fixed line incumbent BT in a report for allowing Chinese vendor Huawei’s equipment to be embedded in the heart of the UK’s critical national infrastructure (CNI) and failing to consult ministers beforehand.

BT is responsible for large parts of the UK’s telecommunications infrastructure. In 2003, it embarked on a £10bn rationalisation and upgrade project, called 21st Century Network. Huawei was among those companies selected to supply the equipment required.

In October last year, the US House Intelligence Committee warned US operators not to trust ZTE and Huawei, saying that the US “should view with suspicion the continued penetration of the US telecommunications market by Chinese telecommunications companies”.

According to the UK Intelligence and Security Committee, BT signed a contract with Huawei to supply transmission and access equipment in 2005, to be deployed across the network from January 2007. BT first notified Government officials in 2003 of Huawei’s interest in the 21st Century Network contract. However, the Committee has been told by the Cabinet Office that officials chose not to refer the matter to ministers, or even inform them, until 2006, a year after the contract had been signed.

In its report, the committee stated: “Whether the suspicions about Huawei are legitimate or unfounded, we consider it necessary to ascertain how the company came to be embedded in the heart of the UK’s CNI. What this Committee’s investigation has revealed is a disconnect between the UK’s inward investment policy and its national security policy.”

The committee added that it sought to understand the reasons behind the failure of BT to notify ministers and was initially told it was because officials concluded there were no means available by which Huawei’s involvement could be blocked and, therefore, that there was no decision to be taken by ministers. However, this now appears not to have been the case, the report stated.

“The Cabinet Office has since acknowledged that such powers do exist and that officials were aware of this at the time but assessed that the potential trade, financial and diplomatic consequences of using them would be too significant,” the report stated.

“We have subsequently been informed by the then Secretary of State for Trade and Industry, the Rt. Hon. Patricia Hewitt, that she did discuss the contract with BT. However, this was in relation to the competition aspects of the decision (and the implications for UK business) rather than any security concerns. Officials did not take the opportunity of her involvement to raise the security issues with her.”

The report concluded that there was no justification for failing to consult Ministers about the situation when BT first notified officials of Huawei’s interest and that such a sensitive decision should have been put in the hands of ministers.

Copper remains dominant in the UK’s broadband network

The UK has passed 9 million unbundled broadband lines, according to new figures from watchdog Ofcom.

This figure represents a 70-fold increase in the number of unbundled lines since 2005, when incumbent BT agreed to provide local loop unbundling services to rivals on its copper phone network.

Super-fast broadband services also continue to grow in popularity, with around 13 per cent of all residential connections super-fast by November 2012 – more than double the 5 per cent reported one year earlier.

Ofcom reports that it expects fibre deployment and investment to increase rapidly in the UK over the coming months.

Despite this rise in unbundled connections however, BT does remain the UK’s dominant broadband provider by far, with a 29 per cent share of the country’s 18 million subscribers, followed by cableco Virgin Media with 20 per cent.

Ranulf Scarbrough, BT

We speak to Ranulph Scarbrough, director of the Superfast Cornwall broadband programme at BT, about winning last year’s Broadband InfoVision Award in the ‘Changing Lives’ category.

This year’s Broadband InfoVision Awards will take place in Amsterdam on October 23rd. For more information and to register, please visit: www.broadbandinfovisionawards.com

Can you bring us up to speed on where the Superfast Cornwall project is now?

Superfast Cornwall has continued to make great progress. Coverage is now around 80% of Cornwall and we expect to complete the rollout next year.

We recently announced, based on how well things have been going, that we expect to take fibre broadband to 95 per cent of Cornwall (up from the previous plan of 80 per cent).

And we also announced we would take fibre to one of Europe’s most isolated communities – the Isles of Scilly – comprising just 2,000 people on five islands 40km off-shore into the Atlantic. This innovative scheme will re-use two international service cables while navigating one of Europe’s most environmentally protected zones.

Take-up is also building strongly with over 24,000 subscribers through 32 service providers, including over 3,000 small businesses. Businesses continue to do great things with these connections.

We are also pushing ahead with our Research & Innovation programme with local universities “Superfast Cornwall Labs” doing lots of work on superfast broadband.

In what ways has winning the Broadband InfoVision award helped raise the profile of what you are trying to achieve?

In several ways: within Cornwall it has helped people recognise the importance and uniqueness of the programme that is underway and encouraged them to get involved. So we’ve seen great take-up as a result.

More widely in the UK it has helped us to highlight to other regions the impact that superfast broadband can have and the need to use it to enable economic and social transformation.

As a result we have had a large number of visits to Cornwall to find out more and many UK regions are now building their own replica programmes, with a number already underway.

And internationally there has been a lot of interest in the public-private partnership model we have pioneered as a means of bring networks sustainably to rural areas.

What has been the most surprising feedback you have had from winning the award?

There has been a real mix. When we have brought fibre to remote communities in Cornwall they have often been very surprised and then a little sceptical. When we tell them that the programme has won a world award it starts to make them realise how lucky they are.

Probably the most fun is when you meet people from central London or other cites that can’t get more than ADSL and they just can’t believe this is happening in such a remote and rural corner of Europe.

How do you plan to further raise public and industry support for the project this year?

We have been promoting the project at a number of industry conferences during the year to get the word out there and we are starting to see other replica activity around the world.

But its important to remember that this is not just about building the network, but about getting people connected and seeing them do new things, work in new ways and be more competitive and productive.

These latter elements are often missing from programmes. We expect to publish research later in the year evidencing how businesses in Cornwall and being more competitive and productive and the maco-economic and social impact of this.

BT has signed a ten year deal with mobile operator O2 to support its launch of 4G LTE services

UK incumbent BT has signed a ten year deal with mobile operator O2 to support its launch of 4G LTE services. BT will build a high capacity transmission network for the Telefónica subsidiary as O2’s roll out of 4G services later this year is expected to place even greater pressure on its network.

The managed network solution from BT Wholesale will provide O2 with the network capacity required to support the increasing demands of customers choosing its planned 4G services, said BT.

BT also said it will provide O2 with a sizeable increase in backhaul capacity by delivering the mobile backhaul links between its base stations and the new transmission network. The new transmission network will also help O2 migrate from legacy TDM to Ethernet based IP services, according to BT.

Meanwhile BT has announced that it is looking to partner with a mobile operator to provide services for its own staff and for its BT Retail enterprise customers. An agreement with Vodafone ceased after Vodafone acquired BT rival Cable and Wireless for £1bn in July last year.

BT maintained it has no plans to offer LTE services to consumers despite having splashed out £200m on 4G spectrum in the UK’s February auction, and added that its latest deal with O2 is “completely separate” to its search for an operator partner.

“The announcement about us looking for a mobile operator partner is for our own staff and the customers we sell to via BT retail – particularly SMEs and large enterprise customers to whom we sell managed mobile services,” a BT spokesperson told Telecoms.com.

The LTE World Summit, the premier 4G event for the telecoms industry, is taking place on the 24^th-26^th June 2013, at the Amsterdam RAI, Netherlands. Click here to download a brochure for the event.

Copper begone: BT’s fibre roll-out is not universally popular

BT’s CEO Ian Livingston has blasted critics of his company’s fibre broadband roll-out, such as TalkTalk chairman Sir Charles Dunstone, describing them as “copper luddites” with a vested interest in preventing UK homes from getting access to fibre through BT Openreach.

Speaking to The Daily Telegraph, Livingston rejected recent claims by the TalkTalk chairman that Openreach is building a powerful monopoly using state funds, adding: “They are not prepared to invest in fibre. It’s a shame they want to hobble the UK economy for their own commercial reasons.”

BT has committed itself to spending £2.5bn ($3.8bn) on connecting two-thirds of British homes and businesses to super-fast broadband networks (mostly fibre-to-the-cabinet), and hopes that the UK government will help meet the cost of connecting the final third, mostly found in rural areas.

BT has been careful to group its fibre rollout activities under the Openreach brand, which provides wholesale access to the network on the same terms and prices as those given to BT Retail. Livingston added: “BT fibre is open to any provider in the UK on the same terms as BT – there are 50 or 60 of them, that’s not what I call a monopoly.”

Orange continued to disappoint its broadband subs in Q4

The UK’s communications regulator Ofcom has revealed the worst-performing operators in the country, with Orange generating the most complaints for broadband in the fourth quarter of 2012 and BT receiving the most pay-TV complaints.

In the three months to December 2012, Orange generated 0.70 complaints per 1,000 broadband customers, with complaints peaking in October as a result of the company’s decision to withdraw its free broadband offer unless customers also purchased line rental from the company.

TalkTalk came second with 0.33 complaints per 1,000 broadband customers, and BT also generated above average complaints levels at 0.30 per 1,000 subscribers. Sky’s broadband service attracted the fewest complaints – 0.08 per 1,000 customers.

BT generated six times the pay-TV industry’s average number of complaints in the fourth quarter of last year, thanks largely to problems with service provision and complaints handling issues, generating 0.24 complaints per 1,000 customers.

BT and Vodafone have paid an additional fee to UK regulator Ofcom for preferred 4G spectrum

UK 4G spectrum licence winners BT and Vodafone have paid an additional fee to UK regulator Ofcom for preferred spectrum in the regulator’s final ‘assignment’ stage of the nation’s 4G auction. The final stage determines where each bidder’s holdings will sit in the radio spectrum.

Winning bidders of spectrum were given the opportunity to “top up” their bids, in order to reflect any preference they had over where in the frequency bands their new spectrum would be located, the regulator revealed.

Niche Spectrum Ventures – a subsidiary of BT – paid over £15m to be allocated the spectrum bands 2,520MHz to 2,535MHz and 2,640MHz to 2,655MHz.

Vodafone, which spent the most of all bidders to acquire spectrum, opted to pay more than £8m to be allocated the spectrum bands 801MHz to 811MHz and 842MHz to 852MHz. In addition, the operator paid a further £4m to be allocated the spectrum bands 2,500MHz to 2,520MHz and 2,620MHz to 2,640MHz.

EE and 3UK did not pay additional fees to dictate where their newly acquired spectrum sits, while O2 was not involved in the assignment stage. The spectrum it won carried an obligation to provide a mobile broadband to at least 98 per cent of the UK population. The winner of this lot was automatically allocated the spectrum bands 811MHz to 821MHz and 852MHz to 862MHz, in accordance with the auction regulations.

The total amount paid in the assignment stage was £27.1m.

The winning bidders have now been issued with licences to use the relevant spectrum holdings, and are now free to deploy 4G networks subject to the conditions of those licences, said Ofcom.

The UK’s four mobile network operators have secured LTE spectrum, along with BT subsidiary Niche Spectrum Ventures. O2 won the coverage obligation 800MHz lot, while EE secured its first sub-1GHZ spectrum. Vodafone got its hands on 85MHz worth of spectrum, including 25MHz of unpaired 2.6GHz spectrum. And 3UK’s newly acquired 10MHz of 800MHz spectrum means the operator has more than doubled its spectrum holding over the past 12 months.

Much of the discussion following regulator Ofcom’s announcement was around the revenue generated for the public purse. Just £2.34bn was raised; Chancellor George Osborne had hoped to secure £3.5bn from the auction.

“The disappointing revenues from the 4G auction are a reflection of the challenges that mobile operators face in growing revenues from their users in the social media age,” said Victor Basta, managing director of consultancy firm Magister Advisors.

Indeed the £2.34 figure is a far cry from what the government raised from the 3G auction in 2000 – a staggering £22bn. According to Jason Yeomans, Managing Director of PMGC Technology Group, the more modest figure raised this time around reflects determination from operators not to repeat their mistakes.

“I think all of the operators felt almost hard done by after [the 3G auction],” he said. “Lessons have been learned and the economy is a very different place now; the network operators have been subject to aggressive price reductions, not just from competition but from the regulator itself.  It’s not a bottomless pit.”

But revenue is not the most important aspect of the auction and Bengt Nordstrom, CEO at consultancy firm Northstream, warned that treating the auction as a missed opportunity for the UK treasury is extremely short-sighted. He believes that the less UK operators are forced to pay for spectrum, the more they are able to invest in building 4G networks and developing new services.

“The boost that 4G will contribute to UK GDP as a consequence will vastly outweigh the additional £1bn they might have raised during this auction,” he said.

Vodafone spent the most of all four mobile operators at the auction; a statement of intent to regain standing in its home market where it is now third-ranked player, according to Kester Mann, senior analyst for operators at research firm CCS Insight. He added that EE also did well in the auction and now has a balanced 4G portfolio at 800MHz, 1800MHz and 2.6GHz and 3UK won the frequencies reserved for a fourth player, as expected.

“BT will use its 2.6GHz frequencies for fixed wireless access. It will selectively target both rural communities, where deployment would be more cost-effective that using fibre, and high-density urban areas that need extra capacity,” Mann said. “But O2 failed to secure frequencies at 2.6GHz which may mean it struggles to meet growing data needs from its customers. This may have been partly due to BT’s strong presence in the auction.”

Now that the auction is all but over, Ofcom should be praised for its decision last year to allow EE to launch LTE using its existing spectrum, according to Matthew Howett, telecoms regulation analyst at Ovum.

“Despite much criticism at the time, the decision was the right one. Without it, we could very well still be arguing about how to design the auction rather than awaiting a host of additional 4G services in only a matter of months. Had it not intervened in the way it did, Britain could very well have been condemned to the slow lane for years to come,” he said.

And Dario Talmesio, principal analyst at Inform Telecoms & Media, believes that today’s announcement is proof that the UK is finally catching up with the rest of Europe.

“In fact, it is probably going to overtake most of the European countries as we will see one of the fastest 4G deployments ever, mainly driven by competition,” he said. “UK mobile operators paid much less than anticipated and every penny they saved on the auction will be gained by UK consumers in terms of better services.”

“The clear loser is the UK government, which now finds itself £1.1bn short of its rather optimistic predictions.”

EE, Vodafone, O2, 3UK and BT all won LTE spectrum in the UK

The UK’s four mobile network operators and a subsidiary of fixed line incumbent BT have won LTE spectrum, regulator Ofcom has announced. But bidding was cautious, with the auction raising £2.34bn; £1bn less than the UK Treasury had hoped.

EE, 3UK, O2, Vodafone and Niche Spectrum Ventures Ltd – a subsidiary of BT –  all won spectrum after more than 50 rounds of bidding. 250MHz of spectrum was auctioned in two separate bands: 800MHz and 2.6GHz. This is equivalent to two-thirds of the radio frequencies used today by connected devices such as tablets, smartphones and laptops, said Ofcom.

The 800 MHz band is part of the digital dividend freed up when analogue terrestrial TV was switched off, and is ideal for geographical reach and in-building penetration. The higher-frequency 2.6 GHz band is more suited to delivering the capacity needed for faster speeds in urban areas.

Vodafone paid close to £800m for 85MHz worth of spectrum in total, including 2x20MHz of 2.6GHz. EE paid £588m for its 85MHz of spectrum, which included 2x35MHz of 2.6GHz spectrum Meanwhile O2 spent £550m for 2x10MHz of 800MHz, the lot of spectrum to which Ofcom attached a coverage obligation to provide a mobile broadband service for indoor reception to at least 98 per cent of the UK population by the end of 2017.

Source: Ofcom

Olaf Swantee, CEO of EE, which launched LTE in refarmed 1800MHz spectrum last year, said the firm was “extremely pleased” with the outcome of the spectrum auction.

“Coupled with our existing 1800MHz 4G network, it consolidates our position as the most advanced, largest and most capable 4G operator in the UK,” he said. “The acquisition of low and high frequency spectrum allows us to boost our superfast data services and coverage – indoors and outdoors, in cities and the countryside.

Vodafone UK chief executive Guy Laurence stressed benefits to the end user. “This is great news for our customers. The next generation of mobile internet services will bring real benefits to both consumers and businesses.”

O2 CEO Ronan Dunne said the operator’s intention is to “go beyond what has already been offered in the market” and give customers a “unique and exclusive range of digital experiences”.

Meanwhile, Dave Dyson, CEO at 3UK pointed out that the operator has more than doubled its spectrum holdings in the past 12-months thanks to spectrum acquired at auction and outside the auction process.

“Doubling our capacity allows us to continue our growth with significant headroom to increase our current base of over 8 million customers,” he said. “Consumer appetite for enjoying the internet via mobile devices continues to grow, playing to our strengths. With a significantly increased spectrum holding we will continue to be the competitive force in the UK mobile market.”

3UK has already indicated that it will not price LTE at a premium.

And BT chief executive Ian Livingston added that the firm has said that it does not intend to build a national mobile network. Instead, this spectrum will complement BT’s existing strategy of delivering a range of services using fixed and wireless broadband.

“We want our customers to enjoy the best possible connections wherever they are and this spectrum, together with our investment in fibre broadband, will help us achieve that,” he said.

MLL Telecom and HKT also qualified to bid but were not successful in their attempts.

Gary Marven, CEO at MLL Telecom admitted that the firm was disappointed not to have won any spectrum. “The auction process has helped us analyse different markets and opened up a number of opportunities that we are pursuing,” he said. “Looking forward we see the allocation of the spectrum through the auction opening the door to increased levels of connectivity and mobility in the UK. MLL Telecom will continue to support our mobile operating customers, build networks in remote areas and help the public sector with their networks while driving new areas such as connecting the growing number of small cell deployments.”

The winning bidders now have until February 21, 2013 to pay for their prizes. One stage in the auction remains, which will determine where in the 800MHz and 2.6 GHz bands each winning bidder’s new spectrum will be located. Bidding in this final stage – called the ‘assignment stage’ – will take place shortly, said Ofcom.

The idea is to take a network appliance and run it as software on servers, storage and switches

Of late there seems to be an SDN (software defined networks) related announcement every few days, as vendors get their ducks in a row to pitch the next evolution of technology to carriers at MWC. But the concept demands a change in mindset for the vendors as much as it does the operators.

Speaking at the launch of the company’s SoftCom SDN platform last week, Sanqi Li, CTO, carrier network business group at Huawei, waxed lyrical about the core virtualisation expectations of SDN, which will see network applications and services run on commodity hardware and software. As a maker of both network hardware and software, this approach will have an effect on Huawei’s business, but not a detrimental one, Sanqi said.

“More and more hardware shipments will be focused on data centre boxes, the likes of which Huawei sells. These are not just x86 processor boxes, but they might also require GPU power for video rendering,” he said.

It’s a big shift for an industry that has built networks around specialised appliances and likely needs critical mass from the vendor community before the carriers buy into the idea wholeheartedly. Yet the telcos already have one cheerleader.

Don Clarke, head of network evolution innovation at UK incumbent BT headed up a recent study to investigate the potential of using commodity equipment for network services and found that, not only did it match specialist gear in terms of performance—it could actually be more advantageous.

“The idea is to take a network appliance and run it as software on servers, storage and switches. Of course, it’s easier to deploy software images than it is to deploy hard boxes, but you can also apply resilience concepts that do not even exist in hardware, as well as it making testing and service assurance easier,” Clarke said.

Clarke is heading up the technical working group of the recently inaugurated ETSI Network Functions Virtualization (NFV) forum, which will focus on implementing network functions in software that can run on a range of industry standard server hardware, and that can be moved to, or instantiated in, various locations in the network as required, without the need to install new equipment.

But the key finding of BT’s investigation is that in order to do this properly, the industry needs standards.

OpenFlow is expected to be the chosen switching specification, while the Cloud OS will be based on OpenStack. Huawei is building a centralised routing control algorithm and the network OS is still to be decided on, but a key feature is that it decouples control from the devices themselves.

Sanqi said that a big part of Huawei’s product development will be in software, as network functions no longer be embedded in specialist network devices will all be controlled by software that needs to be open, abstract, programmable and virtualised.

“Carriers are looking for programmability in software to open up the capability to work with OTT,” he said.

“This next change is less about technology and more about business. The operator business model at present is rigid, slow, and hard to change. Network architecture today is closed, complicated, and still focused on elements that the carriers can control,” Sanqi said, alluding to the idea that telcos should be partnering with OTT services using technologies developed by the vendors.

“Vendors are increasingly responsible for the operator business model,” he added.

SDN World Summit, takes place on 11-13 June 2013, at the Fira Palace Hotel, Barcelona

The shackles are off as BT removes traffic caps from its packages

UK incumbent telco BT has announced that, bar its entry-level deals, broadband packages will no longer have any usage limits or traffic management applied. The move applies upwards from its £16 a month upto 16Mbps copper-based ADSL package, and to its 38Mbps and 76Mbps FTTC offerings.

The move sees it throw down the gauntlet to rivals such as Virgin Media and TalkTalk, which are known for their complex and restrictive traffic management policies and means that BT’s fibre packages marketed as ‘Infinity’ finally live up to their billing. New customers will receive the new unlimited deals automatically, but existing customers will have to enter into a new 18-month contract.

John Petter, managing director of BT’s Consumer division, appears to have learned something new when he said in a statement that: “customers told us that they wanted to be able to enjoy catch-up TV, streamed films and other bandwidth-eating applications without having to worry about going over their limit or being slowed down by their ISP.”

Recently Sky Broadband, which uses BT’s wholesale network, was forced to admit that high uptake of its services had caused widespread slowdown across its network. Petter boasted that BT was confident that it would not suffer the same fate. “Unlike Sky, we’re extremely confident that our network can stand up to the extra bandwidth demands from totally unlimited products everywhere across the UK.”

As an incentive, BT is offering the unshackled ADSL package free for the first six months, while the Infinity package will cost just £9 a month for the same period of time.

Check our upcoming webinar on Growing Business Services Revenues in the Cloud Era

BT has also announced BT Cloud, an online storage locker available to customers on all of its consumer broadband packages. This will allow backup to the cloud of all smartphones, tablets and computers, even when away from the home. Content can then also be streamed to their mobile devices. Those on the top-tier 76MBps fibre or copper packages get up to 50GB to play with.

The Broadband World Forum is taking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to pre-register for the event.

BT is has launched an app offering customers cheaper calls from their iPhones

UK fixed line incumbent BT is looking to maintain its relevance in an increasingly mobile consumer world with an app that allows customers to make voice calls over a data connection from their iPhone and Android handsets, in a similar way to over-the-top solutions providers such as Skype and Viber have done.

The firm will bill calls using the service at the same rates that they are charged for calls from their BT landlines.

According to the firm, the app works best over wifi, but will also work over any cellular data connection. It allows customers to make phone calls whether in the UK or abroad and the app supports up to five users on one calling plan.

The firm is eyeing pay as you go (PAYG) smartphone customers in particular claiming that calls to mobiles at BT’s landline rates are cheaper than standard PAYG tariffs.  It cited its Unlimited Anytime Plus Plan as an example of cost savings its customer can make – users on this plan will be able to make calls to any UK landline number or 0845 number at no extra cost, 24 hours a day, seven days a week. Calls to mobiles will cost from 2.65p per minute.

“BT SmartTalk helps you get even more value from your BT package and much more from your smartphone,” said John Petter, managing director consumer at BT. “At last you can actually call freephone 0800 numbers for free from mobiles and get inclusive 0845 and 0870 calls too.”

According to Emeka Obiodu, principal analyst in Ovum’s Industry, Communications & Broadband practice, the UK’s mobile operators are not likely to perceive the launch of this app as a threat to their business, and will instead be indifferent to the news.

“There are already services such as Skype that offer similar services, and it’s not as if everyone will begin to use BT’s service instead of their smartphone tariffs for the majority of their calls,” he said. “This is more of an attempt for BT to claw back some relevance with customers, and engage more with the consumer segment.”

BT also recently announced that it has qualified to bid in the UK’s upcoming 4G spectrum auction, through its Niche Spectrum Ventures subsidiary. However, CEO Ian Livingston has previously said that the company has no plans to become a national mobile operator.

Almost all of the leading wholesalers in Europe experienced falling revenues from fixed voice, reported Ovum

Despite the economic downturn, intense competition, and regulatory actions, revenues for the European wholesale telecoms market remained steady between 2010 and 2011, according to research firm Ovum. In the firm’s annual analysis of the size of the European wholesale market it revealed that the market was worth $48.4bn in 2011, just 0.5 per cent less than in 2010. This represents 11 per cent of the leading wholesalers’ total European revenues.

The analysis was based on the reported results of the 25 leading wholesalers. Almost all of the leading wholesalers in Europe experienced falling revenues from fixed voice, reported Ovum. While some are mitigating the effect of this decline by broadening the attractiveness of their non-voice services, all of them need to do more, according to David James, principal wholesale telecoms analyst at Ovum.

“Wholesalers must lessen their dependence on traditional wholesale fixed voice sales by meeting customers’ needs for non-voice services,” he said. “Many carriers have already expanded their non-voice portfolios by offering emerging new services such as carrier Ethernet, content distribution, and hosting. However, they must do more to attract and retain customers for their wholesale mobile and non-voice services.”

Mobile wholesale, a growing sector in Europe, offers significant potential for growth based on an increasingly diverse customer base, reported Ovum. However, it requires a more complete and flexible wholesale portfolio than capacity alone. The fixed non-voice sector also offers greater opportunities for innovation and differentiation than voice services do.

Ovum found that a number of carriers, including Telecom Italia and France’s SFR, did increase their revenues from other sectors to more than compensate for declines in fixed voice. This wasn’t the case, however, for BT, the largest wholesaler in Europe by revenue. The firm saw its wholesale revenues decline from 2010 to 2011 as a direct result of falling fixed voice sales. Only one of the leading players in the wholesale fixed voice sector – Belgacom – managed to increase its revenues from the sector, while all of the players in the wholesale non-voice sector experienced growing revenues.

James added that the decline in revenues from wholesale voice services shows no sign of relenting, so wholesalers must take action to understand and satisfy their customers’ developing requirements for non-voice services.

Ovum’s analysis also revealed that the European wholesale market is a highly concentrated one. In 2011 Europe’s top four: BT, Deutsche Telekom, FT-Orange and Telefonica, accounted for over 50 per cent of total European wholesale revenue, with the top ten responsible for nearly 75 per cent of the total.

EE, 3UK, O2, Vodafone, HKT, MLL Telecom and Niche Spectrum Ventures have all qualified to bid for the UK's 4G auction

Seven firms have qualified to bid in the UK’s 4G spectrum auction, including three new entrants. Joining EE, 3UK, O2 and Vodafone are HKT – a subsidiary of PCCW; MLL Telecom; and Niche Spectrum Ventures – a subsidiary of BT.

The companies will bid for spectrum in the 800MHz and 2.6GHz bands, the former band being part of the ‘digital dividend’ freed up when analogue terrestrial TV was switched off.

“The 4G auction will be a competitive process that will dictate the shape of the UK mobile phone market for the next decade and beyond,” said Ed Richards, Ofcom’s chief executive.

“New 4G services will stimulate investment, growth and innovation in the UK and deliver significant benefits to consumers in terms of better, faster and more reliable mobile broadband connections.”

PCCW is a Hong Kong-based firm which has fixed-line, broadband internet, TV and mobile business units. The firm operates in 16 markets globally. MLL Telecom is a UK firm specialising in designing, installing, managing and maintaining backhaul links and wide area networks. And UK incumbent BT formed Niche Spectrum Ventures in June 2012, although CEO Ian Livingston has previously said that the company has no plans to become a national mobile operator.

Earlier this week, the UK’s Ministry of Defence (MoD) announced that it too will auction off around 200MHz of the radio spectrum it owns. All of the spectrum is below 15GHz and will enable operators to beef up their LTE spectrum portfolio.

Under a new four-year extension agreement, BT will add ‘big data’ analytics to its toolkit to further strengthen its customer service capabilities. The agreement builds on BT’s long-standing use of Alcatel-Lucent’s portfolio of Motive Customer Experience Solutions.

BT will upgrade its suite of Motive Customer Experience Solutions with latest-version software to support new features, and will deploy the new Motive Data Collection Manager (DCM), which is used to track the performance of the rapidly proliferating number of communication devices in peoples’ homes.

The data is then made available to BT’s customer service teams so that they can proactively manage how the network and devices perform, ensuring a better overall experience for BT customers.

The addition of Motive DCM to BT’s toolkit will not only make it easier to manage customers’ devices remotely, but also will provide tools to help customers with self-service capabilities.

BT recently revealed that it has passed three-quarters of a million subscribers for its IPTV service ‘BT Vision’ after adding 21,000 customers in the third quarter of this year, and confirmed that it is accelerating its rollout of fibre broadband.

A BT trial with ZTE is delivering 10Gbps connectivity to a UK business

UK incumbent BT is trialling what it claims is the world’s first 10Gbps broadband connection using proof-of-concept technology called XGPON (Tens of Gibabits on a Passive Optical Network).

The trial means that an engineering firm in Cornwall, south England called Arcol UK, which until recently had been making do with a paltry 1.5Mbps connection now has access to the fastest broadband connection in the world.

The technology is a partnership between telecoms equipment vendor ZTE and Openreach, the infrastructure division of BT. The service expands on BT’s existing 330Mbps broadband on demand service, which according to Ranulf Scarbrough, Programme Director for the Cornwall SuperFast Broadband Programme is what makes the technology trial so interesting.

“What is exciting about this trial is that these hyper-fast speeds have been obtained over the exactly the same fibre that carries BT’s fibre broadband services today. All we are doing is changing the electronics at either end.

“This trial shows we are thinking and ready for the future even though there are no current plans to deploy this technology. A lot of this project is about future proofing – making sure that it’s not just the fastest speeds today but that we can continue to be at the cutting edge for five, ten, twenty years.”

According to BT, the 10Gbps connection between Acrol and the local Truro exchange pushes the limits of the physical networking and computer technology and offers more potential bandwidth that was used at the highest peak for the entire Olympics media network. The actual benefits are limited however, as the link to the wider internet does not run at anywhere near 10Gbps speeds.

“We are still only just discovering the sorts of things we can do with these speeds,” said Alun Morgan, technical director at Arcol. These include, “taking advantage of services like videoconferencing and using a cloud-based ERP system so we can access this information elsewhere… it has enabled us to be much more efficient and aggressive,” he said.

BT recently said that it expects its standard FTTC technology to be available to more than two-thirds of UK premises by spring 2014, 18 months ahead of its original schedule.

The Big Bandwidth conference, part of the Broadband World Forum series, is taking place on the 4-th-5^th June, is San Francisco, USA. Click here to learn more about the show.

BT added 81,000 retail broadband customers in the quarter

UK incumbent BT revealed in its quarterly results Thursday, that it is again accelerating its fibre rollout, and now expects fibre to be available to two-thirds of UK premises during spring 2014, more than 18 months ahead of the original schedule.

Its fibre footprint continued to expand in the third quarter of this year, passing 12 million premises with over 950,000 now connected and growing strongly.

BT added 81,000 retail broadband customers in the quarter, representing 47 per cent of the UK broadband market’s net additions of 174,000. It added around 160,000 retail fibre broadband customers and the retail fibre customer base is now more than 875,000.

The telco also passed three-quarters of a million subscribers for its IPTV service ‘BT Vision’ after adding 21,000 customers in the third quarter of this year, and is looking forward to greater gains after signing new sports broadcasting rights in the period.

Chief executive Ian Livingston commented that pre-tax profits across the business grew again in the quarter, despite the economic conditions and the impact of a Court of Appeals ruling on so-called ‘ladder pricing’ related to wholesale calls made from mobile phones terminating on BT’s network.

Total revenues across all operations for the third quarter of this year reached £4.474bn ($7.23bn), down nine per cent from one year previously, while pre-tax profits rose seven per cent by the same basis to reach £608m.

“We have delivered another solid quarter of growth in profit before tax despite the economic conditions and regulatory impacts,” said CEO Ian Livingston. “We continue to make significant investments in the future of our business and we are again accelerating our fibre roll-out.”

He added that BT now expects fibre to be available to two-thirds of UK premises during spring 2014, 18 months ahead of its original schedule.

“We are recruiting more than 1,000 engineers in 2012 to help deliver this,” he added.

BT saw its retail broadband traffic hit new heights during the Games

UK telco BT smashed several connectivity records during the London 2012 Olympic and Paralympic Games, including record delivery levels of daily video traffic and internet traffic on its UK retail broadband network.

The telco designed and delivered a single, integrated communications network (a first for a Summer Games) spanning 94 locations with a critical Games-time service availability of 99.999 per cent.

By comparison, three suppliers were used in Beijing to deliver a network with a far smaller capacity.

BT reports that years of planning went into ensuring that the company fulfilled its role as official communications services partner of London 2012, with BT staff putting in more than a million man hours of work.

Key stats include: over 450 million visits for the official London 2012 website, hosted by BT – four times as many as the Beijing Games website in 2008; more tweets in one day than during the whole of the Beijing Games; and record levels of internet traffic on BT’s UK retail broadband network, reaching an all-time on Sunday 29th July when Team GB won the first of its 65 medals.

During the Olympic Games, daily video traffic increased on average by 19 per cent compared to normal, with Bradley Wiggins winning gold in the cycling time trial being the peak. A BT fibre-based network also delivered TV coverage of the Games from the majority of venues to the International Broadcast Centre for transmission across the world.

Now that the Olympics are over, BT has already begun to pass on its experience and expertise as part of the technology transfer to the Organising Committee and technology partners involved in the next Olympic Games, due to take place in Rio de Janeiro in 2016.

Jeremy Hunt, culture secretary for the UK

The UK’s culture secretary Jeremy Hunt has stated his intentions to provide citizens with the fastest broadband network of any major European country by 2015, delivering speeds of more than 24Mbps to over 90 per cent of the country.

While it remains to be seen whether this will bring higher speeds to a greater proportion of the country than the fibre networks being built in Germany, France, Italy and Spain, these speeds would certainly be a vast improvement on the 2Mbps target set by earlier governments.

Making his comments in a speech at Google’s Campus building at Silicon Roundabout in east London, Hunt’s announcement appears to be a rejoinder to a recent report from the House of Lords committee that found current government plans are too focused on speed rather than availability.

“We simply will not have a competitive broadband network unless we recognise the massive growth in demand for higher and higher speeds,” said Hunt. “Today’s superfast is tomorrow’s superslow. Just as the last government was wrong to hang its hat on 2Mbps speeds, we must never fall into the trap of saying any speed is ‘enough’.”

The culture secretary added that the government is currently considering how to allocate part of the television license fee to delivering high-speed broadband to the remaining 10 per cent of the country not covered by the target.

Dominant telco BT has been having great success bidding for Broadband Delivery UK (BDUK) funds to deliver high-speed broadband to rural parts of the country, with most of the country being wired up with fibre-to-the-cabinet (FTTC) networks – an approach which Hunt described as a temporary measure.

“The reason we are backing fibre-to-the-cabinet as a potential medium-term solution is simple: the increase in speeds that it allows – 80Mbps certainly but in certain cases up to 1Gbps – will comfortably create Europe’s biggest and most profitable high-speed broadband market,” he said.

BT also plans to offer fibre-to-the-home (FTTH) connections on an on-demand basis, and the culture secretary predicted that by 2016, two-thirds of the country will be able to sign up for one of these connections.

However, despite Hunt’s bombast, the government’s opposition have been quick to denounce his speech as lacking in detail, with shadow culture minister Helen Goodman saying: “He boldly declared that Britain will have the fastest broadband network in Europe but then offered no plan as to how he will make this happen.”

The European Commission has already set a target for all European nations to offer basic broadband to all their citizens by 2013, and high-speed broadband of over 30Mbps to all their citizens by 2020.

The Nordic countries dominate the European speed rankings at the moment thanks to their early adoption of FTTH technology, although the larger countries are also beginning to install fibre broadband on a national scale, thanks in some cases to enterprise-led initiative, and in others to government-mandated targets.

“As Virgin and BT continue to grow their super-fast subscriber numbers they are being joined by other players,” said Oliver Johnson, CEO of Point Topic. “From traditional giants like Sky to the smaller alternative networks, the super-fast technologies are on the way to supremacy in the UK market.”

As the fibre-rich connections which power these services continue to proliferate, older technologies such as copper-based DSL are losing popularity, according to the report: the first half of 2012 saw a tipping point where for the first time, DSL started to lose subscribers overall.

“Copper isn’t finished, it’s still an important part of the UK’s broadband strategy, but the days of sub-superfast are numbered,” added Mr. Johnson. “Super high-bandwidth options – whether delivered over co-axial cable by Virgin Media or over a hybrid copper/fibre network by other players – are now where the consumer sees the future.”

However, there is a long way to go yet: there are still more than 16.3 million subscribers to standard bandwidth products, and they won’t all be persuaded to upgrade their connections anytime soon.

Point Topic’s data shows that the UK now has 21.3 million fixed broadband lines. While just 175,000 connections were added in the second quarter of this year, there were over 600,000 new super-fast subscribers compared to the previous quarter.

Johnson added: “Virgin Media is responsible for the majority of these super-fast gains. They have been upgrading and upselling their customer base very successfully over the last 18 months. BT is now joining the party with 150 thousand new super-fast customers in the quarter, their best yet, and their network is now being used by other players like Sky and TalkTalk to add to the number of high-bandwidth customers in the UK.”

The UK government has set a target of 90 per cent of all homes having access to super-fast broadband connections by 2015, with universal access to speeds of at least 2 Mbps. However, the Department for Culture, Media and Sport conceded earlier this week that it is likely to miss the first target due to procurement delays, with rural areas most likely to be affected.

However, despite these delays, the UK appears on track to have super-fast connections available to the vast majority of households by 2015, and universal access to connections of at least 2 Mbps.

A report from the UK’s House of Lords surprised many last week by recommending that the terrestrial television broadcasting system be moved entirely onto broadband networks in order to free up spectrum for mobile operators, and if these suggestions are taken seriously then there is an added incentive for the UK government to ensure universal access to speeds of over 2 Mbps in the mid-term.