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(Bloomberg) -- Boris Johnson promised to bring fiber broadband to every U.K. home by 2025 in his bid for the most important job in the land. Now comes the difficult part.
To have any chance of success, the Prime Minister must first convince telecommunications executives there is a profit opportunity.
“The productivity of the nation isn’t in my business case,” Philip Jansen, chief executive of former state monopoly BT Group Plc, said last month.
The government will step up the pressure later on Thursday when the Digital Secretary Nicky Morgan gathers the heads of Britain’s broadband building companies at her Westminster office. The talks are expected to focus on how to reach Johnson’s accelerated infrastructure target, including a timeline for switching off older networks, according to people briefed on the closed-door meeting.
So-called full fiber can deliver data ten times faster than copper lines. Currently in the U.K., fiber lines carry data over long distances to a neighborhood box, and copper lines connect the box to nearby homes. BT has drawn up proposals for switching off copper networks by 2027, Sky News reported late Wednesday.
The U.K. badly lags European neighbors in full fiber, which reaches only 8% of British premises compared to about 90% of homes in Portugal and 70% in Spain.
The reason is a combination of political will and local circumstances.
A study commissioned last year by British officials suggested that Spain’s dominant phone company, Telefonica SA, opted for a faster fiber network build than U.K. counterpart BT as it faced greater competitive pressure to secure a speed advantage over rivals. A law has obliged construction firms to include fiber ducts in new buildings since 2000, so millions of residents were connected cheaply and quickly.
In the U.K., fewer people live in apartment blocks, driving up installation costs. A similar construction law has been drafted for Britain, but the political disruption around Brexit has delayed its ratification.
Then there’s the challenge of turning a profit on the investment. If consumers get fiber, will they all pay for it, especially now that advances in copper technology can squeeze more data through the same pipes?
“For the foreseeable future, speeds are more than adequate for household needs,” said James Ratzer, an analyst at New Street Research. He also said more than half of the U.K. has access to ultrafast cable from Liberty Global Plc’s Virgin Media, and yet that company is losing broadband customers.
"BT is keen to see the industry work together with government on the big challenges – such as digital switchover and rural coverage,” a BT spokesman said by email.