The European Commission’s Electronic Communications Code that was unveiled last September included a whole raft of implications for broadband providers. Now that you’ve had time to digest it, what are your thoughts?

Ronan Kelly: Personally, I am delighted with what was proposed within the code.

It puts in place requirements to bring Gigabit connectivity to all socio-economic drivers, including schools, hospitals, libraries and government buildings.

This is critical, as it will permit the creation of new digital service models that will in turn allow us to change how healthcare and education are delivered and allow government agencies to leverage IoT automation to help improve efficiencies and reduce costs.

Ultimately, it will permit our societies to have all the benefits that digitisation can bring to the services that underpin our communities.

Over and above, it also demands ubiquitous 100MBps connectivity throughout Europe.

This is a serious game changer, and the application innovation that we will experience in the coming years that can take advantage of that boost in market-wide capacity will be mind boggling.

Just think about everything you use broadband for today, and think about doing it on the broadband connection you had 10 years ago. It would have been unbearable.

The bandwidth always precedes the applications, so it makes for a poor business model to develop applications that require bandwidths that do not exist in the mass market.

The potential for this foundational infrastructure to position Europe at the forefront of this next era of digital society is huge, and we must embrace it.

Return on investment continues to be cited by operators as a key obstacle to deploying FTTx infrastructure. Will anything change in 2017?

The reality is that building a new infrastructure of any kind is expensive and takes time, something that isn’t unique to FTTx infrastructures.

Thankfully there continues to be a lot of innovation in the fibre build industry that has the potential to substantially reduce the cost per connected subscriber. 

Equally, we are seeing the capacity of the equipment that lights the fibres move on to 10Gbps capacity, resulting in a substantial increase in the forecasted longevity of newly deployed optical equipment.

We have borne witness to a number of recent large-scale successful FTTx deployments in Portugal, Spain, France, not to mention the Nordics and the US.

From these, valuable lessons have been learned about the role of local government and even the community in helping accelerate the deployments and lower the cost, while in parallel raising awareness of the benefits this infrastructure can bring.

In turn this increases early adoption and improves the resulting RoI, as this positive momentum continues to build, and many of the RoI questions will dissolve into the background.

When it comes to consumers, UK regulator Ofcom said in December that it was “unclear” why more consumers were not signing up for 30MBps-plus services despite “relatively high levels” of coverage. What’s your view?

There are a number of key drivers on the consumer side.

The first is their elastic spending capacity for broadband services, which typically informs the range of products from which they can afford to choose. 

There is also the compelling need, which we believe will start to become more pronounced as the consumer electronics that are taking advantage of ultrafast broadband begin to benefit from mass market adoption.

For example, 4K TVs are selling in the tens of millions around the globe, and every single 4K TV sold is a Smart TV with native broadband connectivity.

The 4K content first consumed on those TVs will be streamed and the likelihood of 4K UHD disks ever making it to the high street is extremely low.

We have a similar situation with the likes of Amazon Echo and Google Home, each using cloud intelligence to give the perception of smart devices.

Most do not recognise it yet, but these novel devices are the start of humanity’s engagement with artificial intelligence.

Which European market do you think will be the most exciting to watch this year from a fibre broadband perspective and why?

There are a number of markets that I believe will be exciting, albeit but for different reasons.

If I look at the likes of Portugal, Spain and France, we have seen them embark in a meaningful way on the journey to full FTTH.

These markets join their Nordic peers in having very high penetration of fibre infrastructure, and have the potential to spawn much of the early applications that Gigabit societies will take advantage of into the future.

If we are to apply the excitement filter towards surprising announcements, we unfortunately cannot include Belgium as they announced their fibre deployment plans just at the end of 2016.

I think the German market could be one for surprise announcements, along with Italy and Greece.

With a groundswell of competing operators willing to make the investments in alternative infrastructures, these three markets are primed for large-scale infrastructure based competition.

Returning to the UK, do you think BT and Openreach will eventually be two completely separate businesses rather than the legal separation which is due to happen?

It is very difficult to say.

As an incumbent infrastructure provider, BT/Openreach are always going to be in the firing line for those who are underserved.

Will further separation change the economics for serving those who are currently underserved? I suspect not.

But I fully appreciate that this is a very complex question with many stakeholders, and one that is very unlikely to yield a satisfactory answer for all.

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