Full fibre take up will continue below market expectations unless a shake up of existing business models and approaches is urgently pursued. Without change, low fibre adoption rates will remain the most immediate consequence of an altnet community largely out of kilter with the comms channel, giving rise to greater market inertia, according to industry thinkers at last month’s Comms Dealer Insight Session (held in association with B2B operator ITS Technology Group).
The Full Fibre Insight Session laid the foundations for an analysis of trends reshaping the fibre connectivity landscape and gave us clarity of direction on the importance of redefining traditional perceptions of connectivity. The discussion suggested that full fibre success in large part hinges on overcoming the clear disconnect between perceptions of connectivity as a commodity and full fibre’s role as a strategic tool, and identified a number of roadblocks hindering full fibre uptake including a disproportionate focus on residential customers, the likelihood of transitional products extending the life of pre-full fibre connectivity, potential price barriers, the lack of an authority-driven motivating trigger for end user businesses to adopt full fibre, and a general dissonance between altnets and the channel.
Against this backdrop, partnering to solve challenges has become more important than ever, not least in the drive to increase full fibre adoption and transform businesses. But barriers remain, and ironically some obstacles are of certain altnets’ own making. “I wish some of the altnets would think about us and our customers when they design their propositions,” stated Sara Sheikh, Head Of Product Management, Gamma. “No altnet I have spoken to has given me a proposition with a wholesaler like Gamma in mind. SLAs are different and there is no thought given to our customers. There needs to be full consideration in designing portfolios. Some altnets need to think about who they are supplying the service to.”
While in some quarters there is little movement on creating channel-friendly propositions, consolidation is accelerating and has the potential to transform the competitive altnet landscape. Dave Ferry, Head of Enterprise Sales, ITS Technology Group, predicts fundamental changes ahead in what many see is an immature sector. “We need to pull it all together,” he said. “There are circa 150 altnets but only around 30 have done anything meaningful in terms of premises passed – and they are mostly residential. There are platforms trying to pull it together but will they have value post-consolidation? Partners will be happy to work with three or four of the remaining operators. There is a role for aggregators but it’s a short-term play as the market consolidates.”
Tough choices
For all businesses, including channel partners, there are tough choices to make on prioritising investments, which for Luke Hunt, Head of Network Services, Focus, includes how to approach the plethora of fibre providers. “There’s a lack of awareness among partners on options and availability,” he said. “We need aggregators to consolidate the altnets so we have a couple of trusted partners who can support us properly. We can’t have relationships with all the fibre providers.”
Luke’s observation is reflective of Ferry’s prediction that there is a short-term requirement for a tactical solution. Moreover, this evolving dynamic points to the role of close and strategic level collaboration between resellers and forward thinking fibre providers. Mark Thomas, Chief Revenue Officer, Adept Technology Group, commented: “Choice in the fibre market is broad but we work with two or three partners who help me make intelligent decisions. My customers aren’t buying connectivity, they are buying a service. The experience is important to them and collaboration underpins consistency. Without it you fail. The less people I deal with the more important my business is to them.”
Clarity of vision
Unravelling the comms sector connectivity tangle demands a clear view of both the bigger picture and the underlying detail in terms of full fibre being a strategic tool that features strongly in a collaborative relationship. But at the same time traditional industry language and perceptions of connectivity continue to suppress full fibre’s potential, creating barriers to adoption and blurring more than ever the distinction between full fibre as ‘the plumbing’ and a ‘commodity’ product versus an essential enabler that drives quantum leaps in resiliency and service, as well as capacity. “For businesses it’s less about how much bandwidth you have available, it’s more about reliability and resilience,” stated John Whitty, CEO, Air IT. “That’s what our customers are after.”
Fibre providers have the easy job of putting fibre in the ground – the hard part is being obsessed with the food chain. We need like-minded partners to drive the market
Full fibre enables organisations to go beyond connectivity and capacity to experience transformational levels of strategic long-term resiliency and productivity, observed Andy Harris, Chief Commercial Officer, IT Professional Services (ITPS). “Our focus is on productivity for customers rather than nailing our colours to the mast of a carrier,” he said. “We also focus on cloud and security and choose good fit based on reliability. Fibre comes up in customer conversations as part of future proofing the solution.”
According to Thomas, the relationship between Adept and ITS provides a blueprint for success as their shared sense of strategic direction continues to accelerate fibre adoption. “When you work with less people you have more value to them,” he said. “For example, ITS asks where we are going and how they can back our story. We invest together whereas larger providers aren’t interested in me. I’m not big enough. With ITS we have a relationship that is beneficial to everybody.”
In this context, the customer conversation starts by identifying how full fibre can deliver the most significant strategic benefits. And Daren Baythorpe, CEO, ITS Technology Group, underlined the criticality of high degrees of service improvement being the focal point. “I want service providers to realise the importance of being obsessed with customer service,” he stated. “We spend a lot of time with potential partners assessing whether there is a long-term relationship there. Fibre providers have the easy job of putting fibre in the ground – the hard part is being obsessed with the food chain. We need like-minded partners – that’s what will drive the market.”
As mentioned, full fibre builds strategic resiliency into end customers’ infrastructure. This allows partners to engage more closely with clients who in turn are better informed about how to maximise the value of their investment. But driving this success model across the UK is a challenge. “The UK is 50 per cent fibre but convincing people to buy something they don’t think they need is difficult,” commented Baythorpe. “They see fibre as a future consideration and some businesses don’t need 10 Gig at the moment. The challenge facing the altnet community is that some may be struggling with an overspend on rolling out fibre yet people aren’t using it. Why not when it’s the next big thing? Because in many customers’ eyes there’s plenty of time.”
Connectivity transformation is vital to growth, but not all businesses have the same wherewithal or inclination to change, especially where they don’t see a requirement. Not surprisingly, the need for end user education around full fibre and the 2025 switch off came through strongly in the discussion. “Ninety six per cent of businesses are yet to create a plan for the switch off,” said Neil Rampe, Managing Director (Comms Division) Intercity Technology. “We should be asking why rather than talk about the technology. We should find out the motivation for customers not behaving the way the industry would like. Furthermore, we have a cost of living crisis, suppliers are putting prices up and customers are trying to keep their businesses afloat. Someone has to walk in and solve the problem for them.”
Confusion reigns
SMEs are concerned about future growth at a time when most are busy trying to overcome day-to-day business challenges, rather than push through a transformation in how they communicate. “From a client point of view they get different messages, so do nothing,” added Thomas. “We try to educate customers but they often think you are selling to them as an angle. No-one else is saying that this is a UK-wide initiative or providing a consistent story to validate the conversation.”
Building trust into customer conversations around full fibre is a top priority, and according to Matt Reeve, CEO, Modern Networks, high level engagement at Government and regulator level should be at the heart of the UK’s strategic digital agenda. “It’s hard to understand what is happening so I would direct Ofcom to make fibre easy to consume and implement a PR exercise to explain what’s going to happen during the next three years,” he stated. “That would make it much easier for us to help our customers.”
On this important point Whitty added: “UK plc relies on good connectivity. It’s got to be reliable and cost-effective, so why isn’t the Government pushing Ofcom? They should be instructing fibre companies getting investment to, for example, have a licence to do a, b and c.”
To accelerate full fibre adoption also requires a commitment to long-term partnerships, with collaborative efforts focused on elevating service as a critical success factor in the competitive digital landscape. “The aftercare and support is important,” stated Iain Shearman, Chief Commercial Officer, Node4. “When the green light goes out you need to fix it quickly, and we all know there are differentials in service. That’s what we look for in a relationship. Does the underpinning vendor help us meet our commitments? The support relationship is absolutely critical.”
Deepening channel partnerships with service and resiliency at their core empowers both customers and partners, and according to Baythorpe this approach will help channel partners to turn industry change to their advantage. “It’s all about the story and the service that you give,” he said. “If collectively across the UK we are all amazing at service, that drives the need for us to build more fibre. There’s not enough partners obsessed with service. Amazing service drives demand.”