Dark Blue: Firm commitments from incumbent: BT (10M), Belgacom, Australian NBN, Swisscom, Austria, Bezeq Israel, Chunghwa Taiwan, Telus Canada, Telekom South Africa, SK Korea, (U.S.) AT&T, Century, Frontier, Windstream, Belgium, Omantel
Mid Blue: Smaller carriers in Germany, Norway, Finland, Japan
- Published: 31 January 2017 31 January 2017
It's really cheap to just hang a box on an existing remote terminal. "We're rolling out those side pods on the cabinets a quite a place now we have the production hardware, we have the production firmware and we're building a footprint quite quickly now," said Clive Seeley on the quarterly call. "The indications are that the performance of the product over the new equipment is pretty much spot on what we had predicted from the labs in the earlier few trials and I am very pleased with that. So I'm very pleased with where we stand right now on G.fast."
They are on target for 150,000 or so homes passed in the next couple of months and a fast ramp towards the 10M they've promised for 2020. BT is running G.halffast, with a target of ?300 down, ?30 up at three hundred meters. It would be impressive if they hit that; the results I've seen elsewhere are 10%-20% lower. The results at 100 meters - the plan before the beancounters jumped in - will probably be 500-800 megabits split between upstream and downstream. The early trials of G.fast have shown 5%-15% of the lines do not reach the expected speeds. BT and everyone else in the industry are scrambling to find and fix the problems.
The more interesting question is whether Huawei and Nokia have delivered the external vectoring boxes expected about six months ago.
The Broadcom chips in their DSLAMs can't handle vectoring more than 16 ports, which severely complicates the installation. The calculations to vector 300 megabit lines in quantity stretch state of the art chips, especially because efficient algorithms need to be developed. Neither of the companies has shown working vectoring boxes, one reason many G.fast rollouts are going slowly. I've sent questions over to Broadcom, Nokia, Huawei, and BT. I expect "no comments" from all of them. BT could surprise me. They are far more open about their network than the Americans.
BT's 20% stock price collapse Jan 24 is almost unique for an incumbent telco the last 15 years. The market cap went down $8B after BT announced a $650M set aside for fraud in their Italian division and a £200m revenue shortfall. I believe Gavin Patterson's claim he had no idea what was going on and the $650M loss was a total surprise. (He's a great salesman.) Many investors want him to fall on his sword for missing something that big. Others are asking for a refund on the bonuses he received for hundreds of millions in false profits. He's propping up the stock price
At first glance, the $8B fall is disproportionate given the level of the announced shortfalls, which look like $2B to $3B over five years. Analysts looking closer found troubling signs, however. BT has already lost billions getting into software and "global services." Contracts are running out and they are not winning new ones, No one will be surprised if they take large layoffs and chop thousands of heads.
They confirmed the decision to go halffast on the financial call. "The way to think about G.fast is that we leverage the infrastructure that is already deployed for VDSLs. So we leverage the backhaul from the cabinet. We leverage the power supply. Our costs are really just the costs of the new G.fast box." Cable is in 50%+ of England and soon over 60%. It will run at a gigabit down and soon hundreds of megabits up. The difference today probably won't matter to customers, but in a few years it will be a serious disadvantage. Not investing now is a risky decision.
Thanks to Sean Buckley of Fierce for pointing me to this story.
Here's some of the outreach for shareholder suits. Usually, they are unjustified but I wouldn't assume that until I saw what comes out in discovery.