Towards a full fibre CX in the UK

In the UK, the Department For Digital, Culture, Media and Sport (which, naturally, is responsible for defining the country’s broadband ambitions – odd set of things to throw it in with, perhaps, but that’s another discussion) has recently published a swathe of documents setting out its ambition for broadband infrastructure in the UK. The Future Telecoms Infrastructure Review (FTIR for acronym fans).

*SPOILER ALERT* The target it sets is for full fibre – FTTP – by 2033.

Quick reality check – it’s 2018. So why are we getting excited about this? And what does this mean for telco customers?

About 10 years ago, I wrote a feasibility study for BT looking at the different options for evolving its broadband network infrastructure. Make no mistake, the benefits of moving to full fibre are (on paper) significant:

  • Glass is (supposedly) far lower maintenance than copper, so you save a lot in ongoing costs. Although this does assume that some careless water, gas or electricity supplier doesn’t accidentally put a digger through your connection
  • Fibre optic connections can deliver higher speeds over longer distances, so you need fewer things between the end customer and your backbone to propagate and boost the signal. That makes it cheaper and less disruptive to build out – fewer powered kerbside green boxes – compared to copper which needs power to boost, manage and moderate the signal. Ultimately, you can even remove your costly exchange buildings.
  • Fibre optic connections are more stable. Unlike copper which will change its electrical characteristics – and hence the speed you get – dependent on the weather (and we get a lot of that in the UK), fibre should deliver the expected speed come rain, or shine.

From a CX point of view, this last benefit is potentially the greatest. Alongside billing, broadband speeds are the highest source of complaint to UK telcos – contributing to around 40% of all inbound queries. If a customer can reliably expect to have the speed they’ve bought all the time and, more importantly, get the services they’ve paid for delivered reliably all the time, then they should be a happier customer. Win-win.

So, if those are the benefits, why on earth haven’t BT been throwing all their money into rolling out fibre already? Let’s take a step back for a moment and look at a few reasons why full fibre is not necessarily the land of milk and honey.

  1. Access to communication services remains fragmented and prone to change, based on the relationships between communications companies. As the current situation with Virgin Media illustrates, customers can still lose access to TV channels, or other subscription services, through no fault of the technology delivering comms to their house.
  2. There are a lot of things between the computer, or TV/fridge/thermostat/baby monitor, in your house and the service you’re consuming which affect the quality of that service. The comms technology between your premises and the nearest exchange or cabinet is only one of these. The parts of the network where your data shares the road with other people’s data can become congested, even if the first mile to or from your house is clear. Think of it like driving down your private driveway to get to work, only to join a big traffic jam as soon as you hit the main road.
  3. More of those things which affect your speed exist inside your premises. Poor customer premise equipment (routers/hubs), dodgy internal wiring, or just pesky solid walls weakening your wifi signal will all stop you from enjoying the speed your fibre connection can deliver.
  4. It’s actually really expensive to lay a completely new network in the UK. Typically it’s around £1000 per address passed, so for the 26 million or so households in the UK, that’s an average of £26billion, before you even get to the business premises. At that sort of cost, it’s not exactly surprising that rollout has been slow and pragmatic thus far. While the savings in ongoing maintenance may ultimately pay this off, it’s a hard cheque to write.

Given which, it’s not surprising that the UK has spent time trying to squeeze more out of its existing infrastructure. Or “sweating the copper” as it’s been termed (don’t blame me for that one, I’m only borrowing the phrase).

So, at a point when copper broadband technology looked like it could only deliver 24Mb/s, and as HDTV was the new consumer fashion, of course it was easy to justify arguments to move off copper as soon as possible. Today, however, with innovation enabling copper to deliver over 500Mb/s, the picture is not so black and white. Whether the industry has done itself any favours by referring to this as “fibre broadband”, is another issue (and one which CityFibre, among others, would argue strongly).

Copper will still struggle to hit these headline speeds in various scenarios, so it can’t be the answer everywhere, but it’s done enough to justify its place in a mixed technology rollout; Allowing higher speeds to be delivered more cheaply and quickly (in theory) where viable over copper and focussing on full fibre in other areas.

From a CX perspective, as I wrote about before, if I can get the services I want, should I care whether the circuit going into my house is glass, or copper, or coaxial, or 5G or satellite? Certainly in an industry landscape where disagreements between communication companies can cut off subscription services and the number of providers of those services is ever-growing, having a particular infrastructure connecting my premises is just one of a number of factors.

So, what’s good for customers in this initiative?

The key will be in the new products and services which full fibre infrastructure enables. Whether it be through autonomous, self governing vehicles or smart cities, or wider availability of public wifi, IoT, plenty of new and disruptive technologies will emerge to take advantage of the higher bandwidth and 5G. Even in the short term, the convergence of fixed line and mobile data will enable greater simplicity for customers and extra benefits, should telcos choose to pass this on.

It’s fine for Government to set lofty ambitions, but if it doesn’t disrupt the things which inhibit achieving them, it’s no real help. The detail around the FTIR do seem to address some of these inhibitors. In particular changes to Streetworks (digging up roads to lay the fibre) should make this a more straightforward process. Moving away from a situation where a telco has to submit lots of individual approvals and encouraging Councils to look at the strategic picture when reviewing these plans can only help. More could be done to automate this process, there’s still a lot of manual hand-off in it but hopefully this is mitigated by the opportunity to work on larger plans.

Funding is another of those inhibitors. That £1000 per address figure will still loom large in the minds of telcos. One can argue about the rights and wrongs of Openreach being part of BT, or not, but it doesn’t change the need for investment to get infrastructure delivered. There is still work to do for the infrastructure builders to find ways of reducing this cost, whether that’s through new technology or process improvement, but seed capital for the investment cannot harm.

It will, however, be interesting to see how this plays out in the newly competitive infrastructure market. There was some simplicity in the time when a single infrastructure provider would be asked to deliver a network which all could then use. However, with more telcos now wanting to build and own their own network infrastructure, the risk of funding going to multiple organisations all building fibre in high demand areas and still leaving unprofitable locations untouched will need careful monitoring.

For customers, too, this may create problems and make customer choice more difficult. If part of the decision a customer has to make revolves around who owns the infrastructure and, hence, which services they can subscribe to, this may sustain a degree of complexity for the customer which currently revolves around the speed which Openreach can deliver – and whether Virgin Media also supplies them.

For telcos, gaining or retaining revenue streams will also be a challenge. If those new services are delivered by new companies, the ability for a telco to form a relationship with the service provider and gain a slice of the revenue is not guaranteed. Telcos came to the party on Netflix quite late, in some cases, at a point where many people already had subscriptions direct with Netflix. Forming a viable rival content service is an expensive and complex challenge, but it will be very difficult to recoup the investment (subsidised or otherwise) if you’ve not found ways to increase your ARPU or share of wallet.

The impetus added by Government – both in the public sector and private sector – to push with a clear focus on full fibre will help unblock many of the issues encountered so far. But telcos, Councils and service providers still need to put in the hard work to ensure this momentum isn’t lost or the CX opportunity fumbled.

New Services, new customers – a new, old challenge for the telco industry

The comms industry faces a variety of challenges to remain profitable – against a background of falling mobile handset sales and the move away from traditional calls revenue towards IP voice services. The key defence against this is by growing new revenue streams through enablement of new services to customers. And the common feature that these services need is higher bandwidth links to the customer.

Providing more bandwidth will invariably require some uplift in physical comms infrastructure, whether in the exchange, mobile mast deployment, roadside cabinets, the cables between them or the cables out to the end customer’s premises. Delivering this infrastructure is an expensive, complex process typically requiring (in the UK at least) coordination with Government agencies and numerous third parties. While the model may differ slightly between countries with an established fixed-line network and those which are more mobile based, similar challenges can be found.

As well as being the means to increased revenue, infrastructure build is a very expensive activity and, when managed poorly, one which can lead to a high degree of wasted investment. There are two headline metrics for this:

  1. The cost per end customer to deliver new infrastructure. This is typically around £400-500 per customer, but can be as high as £700-800
  2. The %age of spend which ends up in the ground, delivering services, as opposed to being wasted on management, rework or other cost of failure. Again, while the average is around 40-60% of investment actually being spent on infrastructure, some companies struggle to reach half this figure.

The efficient delivery of infrastructure depends on a well managed lifecycle, to:

  • identify the demand within a particular geography (a street, housing estate, exchange area)
  • prioritise the areas of high demand – those which will generate the greatest return on infrastructure investment
  • understand the “bill of materials” needed to deliver working infrastructure end-to-end
  • manage the build of this infrastructure to an efficient and timely completion
  • bring the new infrastructure into active use and be able to sell products and services to end customers, through it
  • maintaining an ongoing view of existing uptake and future demand to feed into the build plan

While it may be simple to think the customer’s concerns focus on straightforward purchasing a service once the infrastructure to support it is available, brand reputation and customer satisfaction can be impacted much earlier than this. Chief amongst these Moments That Matter to the customer will be a lack of communication during the build phase, especially over any delays that might arise which will impact the date when the promised service will be available.

At this stage, the customer’s expectations will be high. They will have been contacted by the telco to identify their interest in new services. They may have been offered promotional rates, as an inducement to sign up early to the new services. They will believe that any dates communicated to them are committed. As a bare minimum, it will be necessary to provide regular updates to the customer, reassuring them that work is progressing according to plan. In situations where delays arise, customers will value honesty and transparency over this with early visibility of issues and changes to plans.

As more companies move into infrastructure build, within the UK at least, customer experience will be impacted by a wider number of moving parts. Some telcos may take direct ownership of all aspects of the plan and build; some telcos will outsource some, or all of their plan and build activities to one, or more, third parties; while others will remain in the retail-only space, reliant on infrastructure built by other organisations.

Those companies managing, or controlling their own infrastructure build will want to ensure as much of their investment goes into service-delivering infrastructure to maximise return on investment and reach the greatest possible footprint.

In all of these scenarios, it will be vital to provide customer experience differentiation, through a tightly integrated stack which allows marketing data to drive planning decisions; planning to be efficiently allocated to labour teams; the progress of those labour teams to be closely monitored, optimised and reported on, both internally and to customers; and for revenue income to be maximised by efficient sales enablement.