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The most embarrassing aspect of the Covid crisis is the international conference calls. The British participant is always the elephant in the Zoom.
While our images slowly materialise at modem speed, our overseas counterparts Florian, Katya and Hank (Junior) zoom ahead of us at 10 times the pace.
There is a broadband crisis in Britain. You can tell by the marketing – the schmaltzier the adverts are, the worse the service is. To get an idea of dissatisfaction, you only need to look at the reaction to online BT adverts for its fibre broadband. Meanwhile, Virgin Media is the subject of regular investigations by BBC Money Box.
Given that Covid has changed the shape of British industry, with a large majority set to be working from home indefinitely, could that be serious for the economy? It presents serious demand for competition.
Why should the incumbents change? BT can still charge £20 a month rental for copper that was probably installed when telecoms were under public ownership via the General Post Office (GPO).
Our best hope for change is if some “disruptive” upstart shames them into doing better. Enter Spectrum Internet, which serves south Wales and parts of southwest England and has a £200m plan to roll out fibre. Its funding source is Infracapital, the infrastructure equity investment arm of M&G, which specialises in backing exactly this type of project.
At the end of 2020, Spectrum appointed a new CEO, Ben Allwright, who created Flomatik and ran the advanced networking division for Finland’s Teleste in his long journey from the toolroom to the boardroom.
It’s nice to see a company led by a man who has overseen both Europe and the inside of a cabling duct. Most executives at BT and Virgin think Co-Axial is that bloke who wrote their Music on Hold. Many are so far removed from their channel and customers that they still believe their own slogans.
So it is massively refreshing to interview someone with lived experience of repairing comms equipment (his first job), installing infrastructure, lobbying Ofcom to level the playing field, inventing new ways to make Britain’s infrastructure more competitive, running an independent network consultancy and creating fibre backbones.
Ben Allwright, Spectrum Internet
At one stage, he worked for a cable company that became part of Virgin, so he has some sympathy for the broadband oligarchs. “Their problems stem from the way telcos were built,” says Allwright. “All these small cable companies were great for local customers, but they all had different systems that were incompatible.
“When companies scale up, they usually lose their secret sauce.”
If that happens, says Allwright, they become expensive for partners to work with. In the early days of comms liberalisation, BT’s range of products and services massively overshadowed that of competitors such as Energis and Telia, but at least comms dealers and network resellers could get their account manager to return their phone calls and expect engineers to turn up.
So how will Allwright stop that happening to Spectrum?
It is practically a greenfield site, with Wales having 12% fibre coverage. As a relative newcomer (it was started in 2011), it doesn’t have to use incompatible databases and it hasn’t got ancient equipment.
Also, there are fewer types of management system to choose from and they are much more mature and stable.
The challenges are twofold. First, getting fibre laid in all the more populated areas of south Wales will be a massive logistics operation, and second, although fibre is the future, the present is dominated by price.
The value of fibre
Getting businesses to appreciate the value of fibre, rather than the false economy of a cheap connection, will be a tough sale.
Isn’t this where the channel should excel? Surely, every small town and village in Wales has a “Jones The Added Value” character who can explain how each pound you spend on broadband brings back £100 in time saved, marketing reach and sales made.
Another advantage is that Virgin and BT are committed to an outdated modus operandum – the content provider. Spectrum won’t be distracted into providing content, says Allwright. Its aim is to communicate with customers with one centralised database and local call centres. The target broadband speed is 100Mbps. Hopefully, that will create a standard that Virgin and BT can aspire to.
The broadband market has changed, says Allwright. The days when you bought everything off one supplier are long gone. Now people buy the connectivity off the network provider, but they’d much rather get the services from experts.
“These days, consumers will get their entertainment from Netflix, Prime and streaming services,” says Allwright. So why sell people stuff they don’t want? The “unwanted landline and bundle of cringey TV stations” model has had its day.
Spectrum has a much more up-to-date business model that offers more scope for the channel. When it was started in 2013 by Giles Phelps, his plan was to offer high-quality networking into rural areas of south Wales. It built some fibre limbs of its own, but hopped onto other networks elsewhere. The proposition has always been business connectivity and managed services.
Ben Allwright, Spectrum Internet
The big advantage enjoyed by Spectrum is its management team and its focus. Virgin and BT see themselves as international businesses, but these delusions of grandeur make the prospect of servicing local businesses seem very humdrum. The only time I’ve met Virgin executives was at a Pega Systems conference in Las Vegas, where they presented themselves as a model of passionate customer service to an audience that didn’t know any better.
“I worked at Virgin for several years and its big decision-making can be very slow,” says Allwright. “If you are going to be a local service provider, you have to be very nimble and reactive.”
National players are at risk of giving people the impression that they don't see the people of south Wales as a priority, but Spectrum has been well received. “People love us because we are much more approachable,” says Allwright. “All our operations and logistics are run from here.”
With the announcement of funding, Spectrum has created 140 new jobs, and seems to be attracting talent from all over the country. “Covid changed people’s perspective about work,” says Allwright. “There were people in Cardiff who were doing massive commutes to other parts of the UK. Now that talent is returning. People are coming away from the M4 corridor.”
This change in attitude allows Spectrum to recruit some of the best in the business, he says.
Steve Cooper, who built a fibre network for (Isle of) WightFibre, has been given the job of connecting up 150,000 premises. He will need all his 25 years’ experience of infrastructure projects when he starts sending teams out into the valleys. Spectrum has brainstormed some very creative ways to meet that challenge, says Allwright.
Chief revenue officer Sally-Anne Skinner will haul the money in and chief finance officer Wyn Innes will count it. Mari Stevens, the marketing boss, could have a pivotal role for the channel if she creates the demand for partners’ service through co-op marketing. Telecoms veteran Steve Maine will be a non-executive, and founder Giles Phelps is chief strategy officer.
Expense of the roll-out
Managing the expense of the roll-out will be a crucial job, says Allwright. When Virgin was building its infrastructure, the cost worked out at £1,000 per unit, and that was with houses packed tightly together in Britain’s urban areas. Wales is a lot more spread out.
At least these days, BT’s cabling ducts and poles are available for all competitors to use. Access to these is a battle that Allwright has fought many times in his previous incarnations.
This fake idea of open competition is one of the many perception battles that Spectrum will have to fight.
BT’s adverts imply that it has a fibre network running at 100Mbps to all points of the nation. It might not have convinced everyone – judging by the angry Twitter responses to its adverts – but the Advertising Standards Authority and Ofcom aren’t taking any action.
This will affect Spectrum as it tries to convince people to make the change.
The other popular misunderstanding that needs to be addressed is that people need something better than they are getting, but domestic households don’t get 150Mbps unless dad is a consultant in robotic surgery, mum is a post-production film editor and the kids are full-time professional gamers and YouTube presenters.
Then there is the green argument. “Fibre needs much less electricity,” says Allwright. These are issues for the marketing department to have fun with – the green, green fibre of home.
Ben Allwright, Spectrum Internet
Meanwhile, Cooper’s team must get creative as they build the network. You’ll see them running fibre along canals, railways and overhead power lines. The lucky ones will get the Bridgend to Cardiff canal job – the less fortunate might find themselves running fibre along the sewer.
By contrast, much of the BT network comprises copper, which was traditionally stuffed into clay pipes, which are now crumbling like an unconvincing marketing campaign. One day, BT might have to rent its capacity from Spectrum.
In the US, there is a new trend for open-access fibre-optic networks.
In 2014, SiFi Networks developed the “infrastructure-architecture” model for a “FiberCity”.
“Designing a network that spans an entire city and meets the requirements of every business, public institution and private citizen poses unprecedented challenges,” says Mike Harris, co-founder of SiFi Networks.
Designing a business’s IT network is complex. The security, redundancy, scalability and sector-specific requirements are just the start. The Si-Fi model makes it easy to adapt to the structure and requirements of each town.
Harris adds: “As the industry evolves, the polarisation between the resources needed to build and maintain the infrastructure, and those needed to provide retail services, is only going to increase.”
Like Allwright, Harris thinks it will be impossible to be both infrastructure provider and service provider. That model will become obsolete, which is great news for service providers. And for our Zoom conferences – we might even be able to switch our cameras on.