Sky CEO rules out plans to build own FTTP/H in UK
CEO of Sky, Jeremy Darroch, has confirmed the broadcaster will abandon plans to build its own Fibre-to-the-Home (FTTH) network. The announcement, which has surprised few in the industry, has come after several attempts to create its own fibre optic network in several locations around the UK, most recently in York. The joint scheme with TalkTalk has struggled for months and is not expected to progress further than Phase One. It has been suggested Sky’s foray into FTTH territory was an attempt to see Ofcom split BT and Openreach and encourage more competition in the marketplace.

Friday, Apr 22nd, 2016 (9:56 am) - Score 5,015

In a somewhat unsurprising development Sky’s (Sky Broadband) CEO, Jeremy Darroch, appears to have now officially ruled the operator out from any ambition to build its own national ultrafast fibre optic broadband (FTTP/H) network in the United Kingdom.

Over the past few years Sky has conducted a number of Fibre-to-the-Home (FTTH/P) style broadband trials, including large customer deployments in parts of Basingstoke (here) and Derbyshire (here) in England. On top of that they’ve also joined forces with TalkTalk and Cityfibre to roll-out a similar network across the city of York (here).

The York trial in particular, which currently appears to be running behind schedule and has yet to see its commercial launch, once hinted at the prospect of being expanded to include two additional cities. On top of that TalkTalk’s CEO, Dido Harding, even talked about a vague aspiration to eventually cover 10 million UK premises through an expanded roll-out via the same approach.

However so far none of the trials have been turned into serious commercial plans and it’s not even clear if the deployment in York will extend beyond its original Phase One goal as originally planned (20,000 premises passed out of c.80,000 possible), with some speculating that the trials were only being used as leverage in the hopes that Ofcom might see them as a reason to split BT from control of Openreach (i.e. encourage more infrastructure competition).

Ofcom’s Strategic Review has now all but decided not to split BT, although they do plan to impose greater separation and offer more access to the national incumbents network, specifically via the Dark Fibre and revamped Cable Duct and Pole Access (DPA) solutions.

Never the less building your own network in a market where Openreach and Virgin Media already have significant infrastructure level dominance is economically very risky and so the confirmation via The Times that Sky will not build its own fibre network comes as little surprise, which is despite Sky recently telling Ofcom’s that they were “exploring in detail the possibility of investing in last mile fibre networks.”

Instead Darroch has confirmed that Sky will not build its own national fibre optic network to compete with Openreach (BT), Virgin Media, Cityfibre and others, adding that they were more comfortable with being one of BT’s wholesale partners. Mind you this does beg the question, if Sky has given up on the idea then what future does the FTTH roll-out in York or beyond have? TalkTalk certainly don’t have the money to go significantly beyond York without help.

In the meantime it’s back to spending billions on TV content and premium sport, which is still Sky’s bread and butter.