Who Will Bell The Fibre-Monopoly Of BT?

For BT, Tuesday’s announcement of Ofcom that made clear their soft attitude towards the ISP, especially for it’s investing in the superfast broadband segment, has come as a much welcome gift. The watchdog’s statement that it is not planning to impose any price control on super-fast broadband services, will practically allow BT to fix its rate for its rival ISPs to access the new broadband service.

The new developments, according to the fear of many, might give an opportunity to BT to monopolise the fibre optic broadband segment. However, the Ofcom chief Ed Richards thinks the other way around that the fibre optic segment was a risky investment for BT unlike the old copper lines of ten years before that was a state owned monopoly. Moreover, he also hopes that any such tendencies would be effectively nipped by, not only the advent of cheap mobile broadband, but also the low cost nature of the existing broadband.

Ed Richards, in one of his statements had put forth a theory that the current broadband services would tend to exercise a competitive discipline on the fibre-optic prices as well. He substantiated his theory by adding that the consumers are not likely to pay anything exorbitant beyond their existing broadband rates for any fibre broadband service.

Meanwhile, Ian Fogg, research analyst of Forrester, has questioned the optimism of Ed Richards that there would prevail a decent competition between mobile broadband and fibre optic rollouts. He says that the two technologies are entirely different in their properties and capabilities, as the mobile broadband operator, will have to struggle against lower speeds as more people sign up to it, while in the case of fibre roll out, even though there would be a slow down, the ISP always has the option of raising the capacity by adding fibre.

However, the expert broadband analyst of broadband suppliers, Chuck Doherty puts it in another way that though, mobile broadband would not be potent enough to intensely compete with fibre, BT would not be short of rivals in the super-fast broadband segment. He fortifies his argument with the fact that the 50Mbps service has already been rolled out by Virgin Media, apart from a number of petty operators having announced localised roll outs.