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Comms Business Live S4Ep7 Digital Britain Special

Comms Business Live S4Ep7 Digital Britain Special

DAVID GUNGAY [00:01:48] Welcome to Comms business Live. My name’s David Dungay, editor of Comms Business magazine. And today, we’re here to talk about the future of digital Britain. Before we get started, shall we do a few introductions. Start on my left hand side. Our sponsor for today, Sky, Nick Powell. Tell us who you are and a little bit sky.

NICK POWELL [00:02:15] So Nick Powell Sky Business Communications with the telecoms arm of Sky into the business market. I’m really pleased to be here and looking forward to the debate.

DAVID GUNGAY [00:02:25] Mr Wilson.

ANDREW WILSON [00:02:25] My names Andrew Wilson head of wholesale for City Fibre is an alternative network infrastructure provider in the UK.

PAUL GIBBS [00:02:35] Paul Gibbs head of UCAS and mid-market for Gamma, Gamma, a wholesale wholesaler selling SIP hosted Connectivity Mobile. I’m sure I’ll probably miss something out, but that covers most of it.

ITRET LATIF [00:02:49] Itret Latif the CEO of Federation of Communication Services, we represent some 300 companies that provide business services to consumers of the telecoms mainly. Most of those guys. I Represent the interest to the regulator, the government.

DAVID GUNGAY [00:03:08] And today’s episode is a little bit different. We have a live audience. You will be heard there, a round of applause at the beginning there. So to my live audience, thank you very much for joining me. We have various professionals from across the market. If you’ve got a burning question, please put your hand up and we’ll try our best to answer it. So Digital Britain, where should we start? Let’s start with the phrase digital Britain. What does that mean to you? Let’s start, Nick. At the end, what does digital Britain mean to yourself and and to Sky?

NICK POWELL [00:03:38] I think it’s a difficult one. Because it’s a bit of terminology that’s been used over and over and over again. So lots of people talk about it. For us, at Sky. We try to look at it through a business lens. So I think it’s important to try and differentiate between the two. So if you look at digital Britain through a business lens, what does it actually mean to the marketplace? And it’s about whether or not our businesses in the UK have access to the right communications to allow them to compete, not just compete, but win against global competitors and have that capability. So there’s there’s a huge array of debate about what that type of connectivity is and 5G fixed fibre to the premise and all those good things. Nice. I’m sure we’ll come into those today, but I think you’ve got to look through that business lens and talk about are we delivering that level of connectivity that allows our businesses to compete so that that’s what we look at. And I think when you then go on to answer that question a little bit, are we a few of us have been in the industry a while. I think when you look at where connectivity was and the price point of connectivity and in particular, I’m talking about fibre. In this instance, I think the UK is in a really good space. So actually you’re in a place at the moment whereby you can pick up use some examples 100 over 100 fibre connectivity roughly for about 300 quid a month. So if you wanta Gig or a Gig , you’re only talking 500 quid a month. Now, I know those prices change and vary depending on perhaps who in the panel you talk to today. But, you know, there’s a rough figure. I would argue that if that’s your biggest problem as an I.T. director, whether you can spend five hundred quid a month, then you’ve possibly got bigger business problems than what’s going on now. Don’t get me wrong, there are then sub debates of this which go on to go. Can you get it everywhere? And I think that then brings the next part of the debate together. But I think there’s a whole digital Britain back to where I started. Are we providing the right level of connectivity to the right places where business need it to allow them to win on a global basis?

DAVID GUNGAY [00:05:37] Mr Gibbs what does that phrase mean to to to Gamma.

PAUL GIBBS [00:05:41] I think for us it’s enabling our channel partners to give their end users that that exactly, as you said, the the ability to go and win business, keep their business afloat. And more importantly, I think the all of the businesses now rely on cloud solutions. Right. So from Microsoft to hosted telephony to sip, everything is underpinned by connectivity. So the importance of that is grown exponentially over the last few years. And I think delivering the best grade service for, you know, for a good price is hugely important to sort of make the UK the powerhouse to to go and win and perform throughout Europe and the world.

DAVID GUNGAY [00:06:22] Sure. Okay. Mr Wilson in the channel, obviously an integral part of delivering these services to business. How important for city fibre is having that delivery mechanism into the into the market.

ANDREW WILSON [00:06:37] It’s 100% important, I mean, we’re a channel only business. So everything from our consumer FTC fibre to the consumer rollout is obviously through through a channel partner. We also have a channel ecosystem that supports everybody from the mobile operator all the way through to traditional resellers. So the channel ecosystem is critical to our business being a channel only player. But for us and coming to the original the prime aggression about digital Britain is about creating a nation that’s that’s sort of free from the legacy architectural legacy infrastructure. So it’s about freeing up the infrastructure to allow companies and consumers to be able to be flexible using technology for the betterment of society and for business.

DAVID GUNGAY [00:07:26] Okay. Itret, obviously as a trade body. You have a quite a broad vision on this.

ITRET LATIF [00:07:31] We have I mean, most of our members provide IP services effectively. So Digital Britain, I suppose this how do we get the IP services working on a reliable manner right across Britain? I think one of the issues that we do have is about connectivity. I think the debate about how connectivity is delivered is an interesting thing that’s been, as we can find out, in the political environments suddenly become very hot topic. But this is a fundamental requirement for digital Britain is to have the proper connectivity for us to actually fully exploit the digital capabilities of the businesses that we support.

DAVID GUNGAY [00:08:08] Sure. Well, let’s let’s let’s talk about fibre then. You know, this critical component we feel for delivering this this vision Andy. Tell us about the where are we with our fibre rollout at the moment, city fibre ploughing sizable amounts of money into that space at the moment?

ANDREW WILSON [00:08:27] Yeah. Well, we’re on with the task. I mean, we got to 2.5 billion pound investment. We have a very clear and defined plan to get to 5 million homes and businesses by 2025. We’re currently live at a metro level in terms of from a channel wholesale perspective in 27 cities across the UK. And every day and month that goes by where we’re putting more infrastructure into into our defined footprint. But the one thing we’re doing is we’re we’re building wants and wants well. So it’s about what we call a well planned city. So we’re lay in sort of two fibres across the premises to not only address the connectivity from a sort of FTTP or ethernet perspective, but also from a from a sell side perspective as well. So looking to support the 5G rollout plans as well.

DAVID GUNGAY [00:09:24] Nick, I mean, how how important is that for us, for Sky and your your plans, fibre?

NICK POWELL [00:09:32] I mean, we we focus on fibre. It’s what we do. I think we just need to be clear of the terminology between the fibre to the premises and fibre. So we provide Ethernet fibre and we can get to 96 percent of business premises. So our proposition is a nationwide one. It’s about delivering those services nationwide. It’s about making that available. And hence back to the point of digital Britain, whilst that still means we miss 4 percent. Actually, you can get those circuits into 96 percent of the population, business population, just to be clear. And then then you’ve got to look at what the growth in demand looks like, because actually we continue to see this exponential growth year on year in data demand. I think the latest figures are 21 percent year on year growth for demand for data in the UK. Nobody is suggesting that’s going to stop. In fact, if anything, it continues up and up and in those levels. So. So you then sort of go, right. Okay. We can get connectivity to 96 percent. Can we get enough connectivity to 96 percent? And that sort of comes back to have you got an infrastructure in the core which can then support that off the back of that? So we work on a local exchange model and our tails are open. Which tails? So we’ve got two thousand eight hundred exchanges unbundled in the UK and we’ve got the core network which allows you to go from the what what you used to be the entry level was a 10 meg is now 100 into the gig and then into the 10 gig bearer services. So having that ability to fibre up for the future is also really key to this debate.

DAVID GUNGAY [00:11:04] Okay, let’s let’s bring it to the channel for a minute, Paul. I mean, when it comes to fibre, where do you where do resellers, channel partners stand to to really gain the most out of that enablement?

PAUL GIBBS [00:11:17] I think availability overseas is key, but I think speed of delivery is probably my biggest thing is, you know, obviously resellers want to build their services as fast as possible. And actually it can be a a stopper for the for the whole of their contract. So what I mean by that is connectivity will underpin all of the other services that they are probably delivering to that end user, be that SIP, be that hosted. And they can’t build any of those services until that pipe is delivered to that premise. And if that takes you know, I said to you earlier, you know we’re not. When I was last at Gamma, the sort of industry average was floating around 80 to 85 days. Well, that’s come down. And that’s that’s a great thing for UK business. You know, the SLA in that delivery time now it’s come down hugely, really. You know, we’re floating around sort of 57, 60 days, which is which is great. But it’s still quite a long time, isn’t it? Still quite like, you know, it’s six. Working days to have an ethernet pipe delivered. Now, if we can speed that up, business will start flowing faster and faster.

DAVID GUNGAY [00:12:20] So whats the answer to that, Itret what’s the answer to getting this decision down? We’ve made some improvements, but there’s still a bit of a way to go.

ITRET LATIF [00:12:28] I think one of the things this way. From FCS, we always thought the incentives on BT were not there in terms of the investment required to deliver the network. I think the topic is now a very hot topic. I think there should be a room branch check about how is connectivity going to be provided across and how fast can it be provided and the business as usual, as you know, moving from 60 days. I think that’s unacceptable, to tell you truth. I mean, it should be within 30 days. I reckon the maximum time should be 30 days. I mean, it should be within two weeks. Really, in terms of delivery. And the thing is that if you give that can lead times, customers are not very confident in terms of taking the services from you because these things need to be finalised and finished very, very quickly. Our suppliers find our businesses find that they could lose customers in those kind of lead times if they don’t work through it. But I think the the issue we have is how do you make sure that these products and this rollout is delivered in a way that is fast and efficient in that respect? I don’t think there is a joined up thinking at the moment. I think there is Ofcom trying to get to behave in a particular way. You’ve got the city fibre rolling out there, but there needs to be coordination, make sure that that connectivity is coordianted and make sure that there’s limited overbuild. I would say and the ability for businesses to consume that fibre.

NICK POWELL [00:13:57] Can I just pick up on something, so one of the things that we found and we’ve been at this now for 18 months in terms of the Ethernet markets, we’re starting to see the trends coming through that sort of give it give us some clear stare in terms of the delivery time frame. I agree. It’s never fast enough, just never is. Right. And when we get to 30 days, that won’t be fast enough either, because people want it tomorrow. And we understand that and we all want it installed tomorrow. But I think as important is that is how you communicate through that process, because we end up in a stage whereby you get very frustrated, we sell wholesale. So you get very frustrated partners that we’re selling to and then resellers they’re selling on to and an end user at the end of the chain that is that they’re going, I haven’t got a service. What’s going on? And we found there’s one of two ways of improving that. And that is you need the right people in place and you need the right people who can talk to somebody at the end of a telephone and deliver that level of customer service. And generally speaking, people will understand when there’s a problem because very few people are putting connectivity in for the first time. So the lovely hotel that sits on the top of a mountain in a really rural area will understand that they’re highly unlikely to get that circuit in in 30 days. But they want to know where you are in that process. And I think that’s then done by having people who can communicate well, but also having the level of automation into services which allow you to have an API, which goes we’re in a good stage, we’re at stage 2 and there’s a problem. And I’m going to tell you what the problem is. And by the way, let’s use way leave as an example. You may need. Mr. Customer to go and speak to the local owner of the local area here and get it through that. So. So it’s not just to me about the lead time. It is also about how you interact with people all the way through that process. And that’s how you deliver a good customer experience.

ANDREW WILSON [00:15:42] I mean, just to add to that, I’ve always been passionate about this subject because we have a as provides we have a duty of care to the channel and to their customers on understanding what that process is and what what things can get in the way of that process running smoothly. So so what can not make it a happy path? I think consumerisation, though, in terms of people expecting things, you know, you order something off of the website and it comes tomorrow it throws that whole thing slightly out of kilter with what’s realistic in terms of what we are actually delivering. I mean, part of our well planned city piece is about delivering as close to the premises as we can and doing it once. We’re not going back and redigging the road up. So therefore, there’s no reason why we can’t in a while plan city get to delivery times that fit, you know, more in line with consumerisation. But whilst we’re all doing this, it’s really important that we keep everybody educated on that process.

PAUL GIBBS [00:16:42] I think that there is an opportunity though so pick up on both points. I think having a very clear portal that communicates everything like you said through an API from the providers to the resellers so they can tell their customer exactly where you are and in the process. And any any hiccups that have happened, you know, because it’s just to be, you know, being about upfront. But two think that, you know, 4G and definitely now 5G having sort of fast start services. So I’m going to deliver a router to that premises. Don’t worry, Mr. Customer. We will start, but we will deliver. Posted it. Whatever it is to morrow and we will run it through this router. And then when the ethernet gets delivered, we will deliver a service that fails over to that router in the event that it gets dug through. Or, you know, whatever that may be. That’s great. And actually, the adoption of that from the channel has been forced because of that SLA that did every time they’re saying, I want to service. And now we see. Yeah, a huge uptake in our so far start services because a lot people didn’t even know that they existed. And to have them, you know, a key thing.

ITRET LATIF [00:17:52] The thing here is that we’re we’re laying the fibre and the issue is once it’s connected. There should be no reason why it can’t be very quick. Yeah, I think we are going through this transition at the moment and hopefully after this transition, demand will be met then instantaneously moving.

DAVID GUNGAY [00:18:11] Would anyone from the audience like to add and to that. Okay. Identify yourself and tell us your question or at your point.

KENNY ROGERS [00:18:18] Kenny Rogers, So my question really is around the delivery time scales, etc. So from our view, the market in the wholesale market is a fibre provider. The question we get is great. We like quicker delivery. But in terms of is there a premium that the end consumer will pay? So we know historically from a wholesale market, if you’re 5 percent cheaper than competition, you get the bulk of the market. If you’re 20 percent more expensive because you can deliver in half the time, actually. What’s the need or that will move it from the consumer perspective to actually say, yeah, I want that 30 days. And historically, it’s kind of. He’s never hit that. It’s kind of we know the delivery is going to be bad on this, but it’s it’s 10 percent cheaper. So, yeah, we’ll take it and we’ll take the pain. I think kind of the the view will now be interesting to understand from the the panel. If there’s a yes, we know the 20 percent of the market will actually pay that premium and we could launch that as a separate product.

DAVID GUNGAY [00:19:21] Interesting, who wants to take that?

NICK POWELL [00:19:23] So personal opinion, I think that’s a bit of a misnomer. I I’ve heard this for years in the industry about I want to take an expedited service and I want to do it this way. That way. The other it typically ends up never bring in the lead time in or if it does by such a negligible amount, it doesn’t matter. And I think that’s a shame. But I think that is just where we are as an industry. I think I think what’s more important is a little bit back to my point earlier, which is if you have the API in place, which actually allows you to see where it is in the process, and if you have the balance of enough people at the end of the phone to go right, I will see what I can do on this. Because because ultimately, as I said, we deal in the wholesale channel and funnily enough, everything is urgent. So, you know, everybody talks about the expedite, but every circuit is urgent and everything has to be in tomorrow and so on. So differentiating those absolute priorities versus the priorities is difficult. So do I think there’s an appetite for a premium priced service that gets in quicker? Possibly. Do I think in the current infrastructure and again, I’ll be clear, I talk about an open reach delivered service because that’s what we provide at this point in time. I don’t think it’s extremely possible on any scale to do that. I think there’s the occasional ad hoc that you probably can. But in general, I don’t feel that’s a genuine product. Sorry, I’m just trying to give you where I think the industry is.

ANDREW WILSON [00:20:56] I’ve worked in the organisations where experdite services have been offered and the take up has been minimal because of the increasing cost. but I think it’s good to have it as an option. A bit like the pre the pre delivery options are good for the channel to offer a customer, but there will be customer specific. I mean some customers are happy to wait. Some customers need it immediately because they may have forgotten to order something or. So I think it’s a mixed bag, really.

PAUL GIBBS [00:21:24] I think what they do is, well, they sort of fast start services give, you know, that resilient floating option. The the end user will definitely pay for resilience. Yeah. What they think they won’t pay for or they’re they don’t feel comfortable paying extra money for a faster service because if you’re offering a faster. And then that’ll flip to a resilient fail over service. Yes. I will pay a monthly premium on my circuit for that because they know that auto fail over and for the reseller that’s fantastic because they get a you know in what say you know a commodities market. I think it’s fair to say, you know, prices are coming down. It bolsters that margin again by having that fast service for that for the reseller. So, yeah, you know, I think delivering the right service to the end user, they will pay more. But I think for that. For that fast start availability.

DAVID GUNGAY [00:22:15] Okay, so we’re I mean, we’re talking about lead times. Well, let’s let’s just talk about the elephant in the room. I think it’s I think it’s time.So, I mean, I’ve seen there’s a bit of a political storm at the moment going on in the country. A particular policy from a particular party around the nationalisation of open reach. I mean, what will this do to things like lead times? Itret.

ITRET LATIF [00:22:46] I don’t think I mean don’t get too political here, but it doesn’t seem to have much detail in terms of how it’s gonna be implemented. And I think the costings seem to be slightly not there as well, because there I think they’ve used to dismiss paper, economic paper on this, and I think they’ve underestimated the whole delivery and the cost of that delivery in terms of lead time. I mean, again, who’s running this service? Again, we know what nationalisation does. I mean, in the old days when the electricity companies used to be nationalised or telephone companies that were nationalised, the lead time to get services were quite low. There was no real incentive. So. So I don’t know how they will square that circle.

DAVID GUNGAY [00:23:33] So the biggest natural competitor to open reach city fibre probably. I’d say, you know, what what’s what’s your what’s your take on this? You know, how does this work within our market? In our current sort of setup?

ANDREW WILSON [00:23:49] I mean, hey, I mean, you know what Mr Corbyn came out and said, we support in principle in the sense that full fibre for everybody. I mean, that’s what that’s what we want. I mean, city 5 is very clearly made its position has been a change agent and in the market and taking that charge to open reach, you know, where we’re currently on with that. The competitive landscape is increasing. We feel like we’ve we’ve helped shake up the market a bit and we’ve got more competitors coming in, which is only good for Britain in terms of being more rollouts across more more areas and more cities. And everyone’s trying to find their niche. And so we see the competitive market place as being advantageous to the industry. We’re seeing lots of inward investment as a result of that competitive landscape. And, you know, we’re on with our building 5 million homes and businesses.

ITRET LATIF [00:24:45] I was going to say the other thing is that have they got the right market model here as well.

DAVID GUNGAY [00:24:49] That’s an interesting question. I mean, we have an expert in the in the audience here, Mr. Phillip Cass from Megabyte. He wrote a brilliant article about the economic impact or realisation of this particular policy. Phillip I wonder if you’d mind giving us your view on on that economic forecast and perhaps some of that detail that wasn’t in in that proposal.

PHILLIP CASS [00:25:15] Yeah, sure. So. So, Megabyte, we’re tracking about 2000 UK telecom, I.T. software, business services and media companies. So we look at their financial performance. We’ve got a huge database. So what we did to address this and you know, there is very little, if any, detail in the manifesto. So the way we approached it is just to try and sort of work out the first order financial impacts. So we think there are at least 400 companies that we would say have telecom services companies in the UK ranging from, you know, the big network companies right through to resellers or the associated companies that do things like, you know, project implementation, mobile machine to machine platforms, etc, so to put some numbers around that, all of these companies revenues add up to about 58 billion pounds. Their profitability is about 16 billion. So their cash profitability, then we estimate that roughly half of that goes back into investment every year. About 4 billion is paid in tax and dividends. And this is an industry that supports about 200000 people. So it’s sort of quite sizeable. So in that context, we think that broadband revenues of probably about 10 billion pounds a year sort of give or take. So it doesn’t take a genius to work out that if you’re suddenly giving away a product that is, you know, a fifth of industry revenues for nothing that is going to wipe out two thirds of industry profits, it takes away all of the money that would be reinvested into CapEx. So, you know, it would have a significant financial impact. It would probably cause a large number of businesses to have sort of financial issues and potentially sort of go bust and, you know, to put that in a national context. So with those sort of revenues, telecoms is about 45 percent of the economy. But actually, when you think the telecoms is the underpinning for the digital economy that we’ve been talking about, it’s going to cause significant issues to one industry, but then, you know, the knock on impacts on Britain digital economy. We think would be sort of much more significant than that.

DAVID GUNGAY [00:27:20] That’s great. So, I mean, Itret. I mean, if you’ve come from a utilities side long ago, I mean, a nationalised can, which we can’t. Can we treat telecoms the same as we gas and electricity?

ITRET LATIF [00:27:34] I wouldn’t nationalise one. The thing here is that competition is good for for development. And that’s been proven. I mean, in the electricity and the gas industry they have improved tremendously in the amount of money that’s gone in and investing in networks. So it’s billions. Billions. That’s that’s dumped through private investment. So I think there needs to be another model in that respect. We’ve been from an FCS point of view, we’ve always been asking for open rich should become a legal entity that owns the assets, the infrastructures, and actually be regulated so that it’s actually is not incentivised to reach all corners of the UK affected with the fibre. And and what we’ve got now is a revolution rather than evolution. We should have an evolution in terms of the network should have been in a fibre, should be developed ten years ago. It should have been rolled out as normal part of upgrading of a network. But it’s regarded as a it’s more of a revolution now. And unfortunate. We have to get I mean, the regulator involved, everybody else involved to try to get that happening. So I think the model is not right here at the moment. And if you are going to reach the not spots, I don’t think the incentives are there. I mean, the competition is great, but is in the areas where there’s going to be commercial incentives for that to happen. But what’s going to happen in not spots?

DAVID GUNGAY [00:28:58] Sure. Okay. Well, from a from an end customer point of view, I mean, what what. What things about this and this potential outcome should they be worried about most? Do you think? paul what do you think?

PAUL GIBBS [00:29:13] I just think that, again, I’ll go back to things that speed of delivery. Will that be affected? I think it will be. And you know, the other part of it is I’ve got I’ve got to regulate myself. And what I say and I think that, you know, a digital Britain, everyone is behind delivering that. We know we are behind the curve with Europe. You know, we just are. And I think everyone wants it to speed up. You know, we’ve all leaned on, you know, the right people to get that to get those services out there, to speed up, to get greater bandwidth available for everybody. And I think we are in that transitory phase at the moment. And frankly, I think end users are are are willing to willing to pay for it. You know, you know, delivering broadband for free. Yeah. You know, I get that. But making it available to everyone. We should be there and we should be there now. Yeah. You have asked me what that’s my big thing. We should be there now. We should be able to go and do business with that restaurant on top of a mountain without worrying about it, about the fact that I can’t get I can’t get broadband circuit up there or ethernet circuit and I think that’s that’s where we as a nation need to be, because it all adds so much to our. Yeah. If if I think that one of the quotes was 59 billion in productivity is worth to deliver digital services to everyone in the UK. So. So let’s focus on that and go actually let’s ramp it up and deliver it in a better way.

ITRET LATIF [00:30:47] And one of the things that’s I mean, I was part of the business connectivity forum. This mess was running. And there is timidness. In terms of businesses trying to adopt the new technologies because the connectivity issues, because they’re afraid of disrupting their business. So we need to make sure we have a world class network to allow them not to be worried. I mean, it’s it has to be as good as or better than electricity. It was it has to be always on type of thing. There is no no room for this or, you know, nearly on type of approach. And fibre does give you the underlying characteristic that will provide it. But also what we need to also understand, 5G is coming down and I think there has to be coordination between all these technologies. It’s just I don’t think you can put it in silos. And when you talk about just digitisation or digital Britain, it needs all those things coordinated and working together. And because the applications you are getting are a common using the IP. So, you know, the IP is making that converge, the connected to converge. So what we need to make sure is that the marketplace allows innovative new businesses coming in or business, existing businesses, suppliers to be able to access both of those infrastructures. And there is no commercial impediment for that to be.

ANDREW WILSON [00:32:02] I think I think whatever the political biases. So whatever policy becomes into power, then what what is critical is continue government support. In helping us deliver these services as quickly, as efficiently as possible. You know, just calling out way, leave us with one prime example. I mean, it’s been an elephant of our industry for some time. I think any support we can we can help with almost regulate in that in a way that becomes standardised across our industry will help speed up the delivery of that infrastructure.

ITRET LATIF [00:32:37] Sorry, I was going to say, like the electricity area where you have powers to be able to do that. I think these are kind of things that the model needs to change to provide that critical infrastructure.

DAVID GUNGAY [00:32:47] Well, anyone in the audience like to offer a question or offer an opinion. Richard.

RICHARD [00:32:54] Just appoint that Andrews touched on because because we see as well that there seems to be a disconnect between the government, which is being very bullish about the rollout fibre. But then when you actually get down to the council level, you don’t have that urgency. And that is slowing the rollout of fibre across the whole of the UK. And it’s not so much a question or more a comment. I mean, is there anything that the industry can do to sort of try to relieve that from because it is a big problem at that time. Yes.

ANDREW WILSON [00:33:23] And you know, we actually recently held a sale across our Target City footprint. We held an event where we invent invite all the CEOs and various councils to a forum where we started to work with them as a group as opposed to on the individual city basis. So we created this club effectively. So we start to educate those council leaders on what we lives are, how that affects how we how as bringing more services to those cities can help with the GDP of that city and help it with investment into that city footprint as well. So we’re actually working quite strongly with with with local government in that way.

PAUL GIBBS [00:34:06] Are they targetted on it, though, because I think that you’ve had to do a seminar. And you know, I worked in that sort of local government area when I was doing some consultancy a few years ago. And I think that is just a it’s a scary place to be when you can go in there and say, I can, you know, deliver these savings to you. Well, actually, I don’t look after the savings that’s in another silo that’s up in it. It and it was a real it was a real eye opener for me because I didn’t realise that that’s where it was. And the targets associated, I think if we actually put targets on the councils to to make their constituency or whatever, the word is fully digital as fast as possible, it would probably be greater. You know, a good thing for the U.K.

ITRET LATIF [00:34:51] I think also sorry I’m just going to say DCS barrier busting team as well, which supposed to have been reducing these kind of issues. And I think they were trying to get these councils to work. I mean, you’ve got really good councils and some not as good. And I think they were trying to create the standard to have the gold standard type of approach. So so I think it may be worth talking to DCS barrier busting team to work out where they are with that? But I do understand those issues because they do have different priorities. They don’t seem to sink from the same hymn sheet.

DAVID GUNGAY [00:35:26] Thank you, Richard. So, what does this all mean for four channel partners? I mean, what’s the what’s the what does it mean for their service offering for their business customers? Nick?

NICK POWELL [00:35:38] I’m just still mulling over the last question a little bit because I guess I’m sort of sat here and to link the two together without sounding arrogant about it. We aren’t encountering that level of problem of getting through way leave at the moment. So we see that things have improved massively over the years. And actually, if I come back to that, probably where I started with the digital Britain conversation, where we get to 96 percent of the UK. So I’m really keen to understand and this stuff comes into the channel. So I will answer the question comes into the channel partners bit as well, which is what percentage do these problems account for? Are they outliers or are they genuinely the bit causing businesses problem in the UK? And I think that’s what we need to understand, because sometimes you can and this doesn’t mean it’s not important to people, but sometimes you can spend an awful lot of your time debating a small percentage and actually turn around and go, actually, we are getting great services, can we not just Sky amongst everybody in the industry and through channel partners to a hell of a lot of the market out there. And then you also take it to the next step, which says, so if you know that’s a digitally enabled part of the UK and you have the chance to put your business there, surely you choose there. So I think from a channel partner perspective, you’ve absolutely got to deliver them the the API infrastructure, the ability to understand where the networks are good, bad or indifferent, where the capacity is. And if they’ve got all of those tools, then they should be being transparent on to their partners and their own customers to get. This is what you can have in these areas. So I’m probably not answering anybody’s question there, but I do I do struggle with this debate a little bit because you sit there and go, how huge is this to people?

ITRET LATIF [00:37:26] I think there is a debate about that. But that connectivity. You know, I didn’t recognise the 96 percent capability there because there is the debate about what do businesses really access in terms of what is their access? Because, I mean, the rising have come up with some statistics which kind of were looking at the do serious side of things. That’s not true for us. That doesn’t work. So I think we I think the question is and the answers that we need is what is the true capability of our networks at the moment? And I don’t think that it’s clear to me and I think that’s still a debate. And I think people have different opinions to you nick in that respect. I would say.

NICK POWELL [00:38:04] So what what I’m giving you is that from a Sky perspective, maybe we can reach 96 percent of UK postcodes with an ethernet. And that’s not just Sky. There’ll be other people that can do it as well.

ITRET LATIF [00:38:15] It’s all about fibre, ethernet? You put private circuits and all the other bits. Bits. But in terms of fibre connectivity, that’s not true. Absolutely. So. So so businesses should be able to benefit from that as well, not just the ethernet elements or as well but. Yeah. And so sources and so you know you have different grades of businesses, different requirements. So we need to look at all the layers here.

PAUL GIBBS [00:38:41] I think looking at DTP executive, I think that, you know, as we move away from exactly, you know, that sort of FTTC that we’ve all been selling for years and moved to FTTP, the availability of that, it’s actually quite scary. You know, when you look at that is what is it, 6 percent, 8 to think percent, less than 6 percent by the end of next year. But that you know, getting Britain digital is is you know, we need to put our foot hard down on the accelerator to make FTTP deliverable to business.

DAVID GUNGAY [00:39:12] Let’s talk about the timelines then. I mean, what do we feel about timelines. Your city fibre putting stuff on the ground at a rate of knots at the moment, you know, Boris Johnson famously came out the press and said, oh, 20, 30 is just not quick enough and wants to see industy be a bit more aggressive. What’s your what’s your stance?

ANDREW WILSON [00:39:32] our plan this five million by 2025? That’s our plan. And we are looking to accelerate that program as well. So we’ve got a really clear timescale, a clear investment plan. You know where we’re going. We know what we’re doing. And we’re doing it really well. So it’s about, you know, of learning from that and doing it quicker. And those cities, those areas of deployment will be full fibre. Not sort of pseudo fibre. There’ll be FTT P Ethernet services. And then and then, you know, macro cell sites like that.

PAUL GIBBS [00:40:09] There’ll be as aggressive as we let the channel partners be on delivery. Right. So so, you know, I think if we if we deliver the services in more locations, the channel will be aggressive in those areas. They will just go out to those businesses and say, I will deliver this service to you. And the uptake will be so fast. But we’re not there. But that’s where we need to get to. Okay.

NICK POWELL [00:40:30] So what do you mean by aggressive?

PAUL GIBBS [00:40:32] Well, I’d say what I mean by is, is having having the services there like FTTP and in areas. There aren’t there? But, you know, we have channel partners, as we all do, sat in in all areas throughout the UK. But if you know it’s available, the channel partners will go out and target those areas, you know, and deliver those services to business because it’s quantifiable, you know, is to say I can take your business from X to Y, buy these services and we have the ability to deliver them now. That’s I think that’s what I mean by aggressive.

DAVID GUNGAY [00:41:05] We’ve got a questioning in the audience. Lance Spencer. Yes. Get the microphone over there.

LANCE SPENCER [00:41:10] Lance Spencer, Network Associates. So is it based on something Nick said right at the beginning, which he was talking about business connectivity at 500 pounds a month, maybe 480. The point about fibre to the premis is you’re talking about 25 pounds a month, a fraction of the price. And the problem you’ve got is where fibre nations got experience of rolling this out in York. When you’re selling at 25 pound, it’s hard to justify the investment to roll the fibre out, but that’s the end customer’s expectation. In the consumer world. He’s getting a gigabit fibre for 25 pounds. So why would he pay 500 pounds? So you can see the conundrum that the industry has got so 500 pound private investment, wood fibre, the whole of the UK. If everybody was willing to pay five hundred pounds. But most consumers, all consumers wouldn’t pay that. Most businesses can’t afford or are willing to pay that sort of money. So the question is at 25 pounds, city fibre have got a lot of experience in this. How we going to justify the investment?

ANDREW WILSON [00:42:14] Yes. So based on SLA, the customers. So. Right. Well, I think the pricing is sensible still to be defined really in the market in terms of what a 1 gig FTTP service is acceptable at that end of the host mini market. But equally, there is there is that sort of conundrum between buying a full fibre service, Ethernet services and FTTP, but it will come down to the speed of fix on a service. How resilient that services is that service contended it is of any conventional network and those things come into play. If someone willing to pay 350 to 500 pound for something versus someone paying 25 to 80 pound for something.

ITRET LATIF [00:43:01] And the business will decide what it can tolerate in terms of their connectivity. I mean, some may just use as a phone. Another was will require as a central part of the normal pulse systems. And, you know, they’ll have to pay for what they think they can tolerate.

LANCE SPENCER [00:43:15] For larger enterprises they can afford 500 pounds is the resilience and reliability and all of that. But for the vast majority of small to medium enterprises, that’s an unrealistic number. I would suggest and certainly from the experience I’ve had, it is unrealistic. When you go around business, states and look at the typical types of businesses on those estates, some will pay the 500 pounds, but the majority are on broadband or an FTTC and they’re not willing to pay that significant increase and they’re expecting this full fibre connection at those low end prices. And the service won’t be the same, but they’re not willing to pay 20 times the price will mostly won’t pay twice the price.

PAUL GIBBS [00:44:02] That seems alarmingly cheap at 25 pounds. I mean, we definitely think we are not at that price point and I think that delivering a business great service comes comes with a premium. Yeah. Not 20 times that price.

LANCE SPENCER [00:44:23] I was gonna make the observation. I mean want one. Just picking up on your point now. I mean I’m a gigaclear customer in a rural area and I’m happy to pay 80 pounds for a free gig and I think, you know. Okay. Some fibre operators talk about a lower charge on that. But clearly, yes, I think pricing on the whole is going to be sort of higher than it is for, you know, FTTC based product. The other thing I wanted to note about talking about how aggressive we are in the rollout. From our perspective, we’re in an absolutely ideal scenario in terms of the investment environment. Yeah. So basically, you know, we have very low interest rates, there is huge amounts of money among infrastructure investors, private equity investors, all looking for high quality assets. And at the moment, infrastructure is very much top of their list, whether it’s data centres, whether it’s fibre networks, whether it’s mobile towers. So I think, you know, we’re in an ideal situation and going back to be the elephant in the room. The one thing that worries me is if we do something to to basically make the UK a much less favourable environment, the money is going to be sucked out. Yeah, the government will have to fill a hole, however it’s going to go into combat. So, you know, I’m all for at the moment just company sort of going out and borrowing and building out fire at the rate they are now doing.

ITRET LATIF [00:45:44] Can I say on price is also a condition that will determine its as well. So if you have got several service providers, you know, there will be some competition. I mean, the base costs may go up. I mean, because of the infrastructure build and the different type of structure. But there will be competition.

ANDREW WILSON [00:46:03] Coming to your original point about what does it mean for the channel. I mean, that is a huge opportunity for the channel was massive pent up demand in the market. So the channel can really take advantage of that. I think also as an industry, you know, we need to not cut our own throats. You know, we’re quite good at that. And I think there’s a pent up demand in the market. We’ve got resellers that they can serve out demand. And I think we can we can make money out of it. And customers and consumers can get what they want.

DAVID GUNGAY [00:46:34] We’re coming towards the end of the session now. Let’s just should we have a few key takeaways, what we’d like our audience to walk away with. Itret what’s your 1 key takeaway?

ITRET LATIF [00:46:47] I think if we are going to roll out fibre renewal probably digitalise Britain in that old digital Britain. I think we need to have look at the market structures and the way regulation works. And I think we’ve got great new companies out there rolling out fibre but if you want fibre everywhere and there’s needs to be incentives to allow that happen. I know a bit of UK trying to do something like that. But I think maybe open reach needs to be restructured in the way that it becomes a proper infrastructure utility that owns the assets. And it’s just incentivised to deliver.

PAUL GIBBS [00:47:21] Yeah, I think I agree with your point in the fact that I think it’s a hugely exciting time for the UK. And I think, you know, delivering fibre to everyone that will benefit the UK, you know, unquantifiable probably, you know, it’s huge. But, you know, at a price, you know. So I think I think people are willing to pay for that service. And I think having the resellers that can deliver that service that I’ve got operational cost associated to it, and they will manage that whole service delivery for the end user. So I think, you know. Yeah. My takeaways. It’s an exciting time. Whoever whoever gets in. But I think it’s an exciting time for Britain.

ANDREW WILSON [00:48:04] Yeah. I think we at city fibre we’ve made the position clear that we we we are seen as a change agent. We it goes beyond city fibre. It is about shaking the market up, aggravate in the market positively. And we have a game plan. But then it’s also attracting lots of inward investment and lots of other people’s game plans as well, which is only good for this country.

DAVID GUNGAY [00:48:28] Last but not least, our sponsor today. Nick.

NICK POWELL [00:48:32] Yeah. I think we just can bring all these parts together. So so we all understand them. And then and then the job of us, of ourselves is to give that message to the partners so they can deliver it in a clear way to the end customer. And as long as we do that and we get it right. And also take Andrew’s point earlier. You’ve also got to remember these networks still need to be invested in. So, I mean, we need to make sure there’s enough in this market to make sure we are delivering that growth for the future. And because when we get digital Britain. Right, take it will carry on. Okay. So it doesn’t stop there. You got to do the next bit. And that needs investment and it needs quite deep pockets. And the end carriers and the providers have to have those pockets to keep the market going.

DAVID GUNGAY [00:49:11] Well, thank you very much for joining me. And thank you to my audience for joining me here as well. My name’s David Dungay. You’ve been watching comms business life. Thanks for watching.