The broadband research firm Point Topic reports that fibre based broadband network that BT has announced to launch will not only provide super-fast broadband services to the broadband customers in the UK, but will also help the ISP to achieve higher revenues once the project is completed. Tim Johnson, the Chief Analyst, Point Topic says that the BT’s 1.5mn FTTP & FTTC network costs just £150 per household as against £800 per household reported by BT in its earlier estimate of £20bn fibre broadband network. In addition, the research firm believes that the existing copper network will be worth only scrap value within 10 years without the new fibre optic broadband services.

“I believe investment in NGA is essential for BT, and it should generate a good return for decades to come. On the other hand, if BT doesn’t renew its local loop infrastructure its existing copper network will be worth only scrap value within 10 years”

He has further said:

“Fibre in the local loop combined with BT’s 21CN project allows BT to provide a complete IP-based telecoms environment to the end user. Customers should get more flexibility for less cost and dreams like seamless fixed-mobile convergence will become reality,”

It should be noted that BT has recently announced its fibre optic broadband network to provide faster internet services to 40% of the homes in the UK. The project will cost £1.5bn and is expected to be completed in the next five years. As for the cost of the project and the revenues, Johnson says that “BT stands to make good margins on this first phase of its next-generation investment and needs to earn only about £3 per month per household for a good return.”

“Of course, even £3 a month would be a heavy extra burden to put on the price of broadband services. But the £3 is for the partial replacement of what broadband customers are already buying, not for something additional.”

“BT will also get lots of benefits from cost savings and other new services, besides basic broadband. So I don’t think the NGA investment should increase the cost of broadband overall – although people will get a lot more for their money.”